How to pay PAYE/Class 1 National Insurance/CIS

This guide tells you about the payment options for employers to pay PAYE tax - including Construction Industry Scheme (CIS) and Student Loan repayment deductions - and Class 1 National Insurance contributions (NICs) and explains the payment deadlines.

If you are looking for guidance on how to pay:

  • Class 1A NICs
  • PAYE Settlement Agreements
  • PAYE Late Payment Penalties

please see the 'More useful links' section at the end of this guide.

If you are a large employer (250 or more employees) you must pay electronically.

You may have to pay penalties if you do not pay your PAYE tax/Class 1 NICs (including CIS and Student Loan repayment deductions) on time and in full.

On this page:

UPDATE: From April 13 employers will pay one HMRC bank account

Employers who make a payment to HMRC by:

  • Bacs Direct Credit
  • Faster Payments by online/telephone banking
  • CHAPS

will make their payments to a single bank account from April 13. From month 1 of the 2013-14 tax year payments should be made to the Accounts Office Cumbernauld account.

HMRC have started to send employers information about this change ready for 2013-14.

Top

PAYE tax/Class 1 NICs payment deadlines and late payment penalties

PAYE tax/Class 1 NICs electronic payment deadline

Your cleared payment must reach HMRC's bank account no later than the 22nd of the month following the end of the tax month or quarter to which it relates. If you are a large employer (250 or more employees) you must pay electronically.

PAYE tax/Class 1 NICs postal payment deadlines

If you don't pay electronically and pay by post, your cheque must reach HMRC no later than the 19th of the month following the end of the tax month or quarter to which it relates.

Quarterly payment option for small employers

If you estimate that your total payment will be, on average, less than £1,500 per month, you can choose to make quarterly rather than monthly payments. You must still submit your Full Payment Submission (FPS) on or before the date you pay your employees. For further information, see the section of this guide 'Notifying HMRC if no PAYE tax/Class 1 NICs payment is due'.

Annual payment option for employers

If all payments are paid to your employee(s) in a single tax month during the year, you can choose to become an annual payer. This means that you pay HMRC once a year on the due date and you don't have to complete a monthly nil payment notification. However you must tell HMRC so that your records can be updated and to avoid them contacting you about unpaid amounts.

Late payment penalties

You may have to pay late payment penalties if you don't pay your PAYE tax/ Class 1 NICs (including CIS or Student Loan repayment deductions) on time and in full. Late payment penalties apply to all employers.

Find out more about late payment penalties

PAYE/National Insurance payments and deadlines

What happens if you can't pay

Top

Using the right Accounts Office reference number

When you make your payment to HMRC it is important that you use the right reference number. This makes sure your payment reaches your account and that way you won't get reminders after you've paid.

Your Accounts Office reference number for current month or quarter payments

When making your current monthly or quarterly payments you'll need to provide your Accounts Office reference number. You'll find this printed in the format 123PA00012345 (this reference is only an example and should not be used to make a payment) on the letter from HMRC headed 'New employer registration and reference numbers' that you received when you first registered as an employer, on the front of the payment booklet HMRC sends you, or on the letter sent in place of a payment booklet.

It is important that you show the reference number with no gaps between the characters, otherwise it could lead to delays in updating your records. You can check the number using HMRC's online checker tool.

Check your PAYE reference for current month or quarter payments with the HMRC reference checker

Your Accounts Office reference number for payments for a future or previous month or quarter, or a previous year

If you send your payment to HMRC earlier or later than they expect it you will need to tell them the year and month your payment relates to so that they can allocate it to right period. You still need to use your 13 character Accounts Office reference but with some extra information. For example if the payment you are making is:

  • for the current month or quarter (due on the 22nd) but is paid early - before the 6th of that month/quarter
  • for the current month or quarter (due on the 22nd) but paid late - after the 5th of the month after it's due
  • for a previous deduction year
  • a second payment for that month or quarter

When paying by Bacs Direct Credit, Faster Payments by online /telephone banking or CHAPS you need to add an extra four numbers to the end of your 13 character Accounts Office reference. If you have any difficulty with including an extended reference number on your payment request you should speak to your bank or building society.

When paying by Direct Debit or BillPay you need to enter your 13 character Accounts Office reference in the reference box and then enter/select the correct year and month in the separate boxes provided.

The table below shows you the different months and quarters for the year 2012-13 and what information you should add.

Your payment reference number for payments for a future or previous month or quarter, or a previous year

Payment for the month or quarter ended

PAYE month or quarter number

Tax year ending and PAYE month you should add

5 May

M01

1301

5 Jun

M02

1302

5 Jul

M03/Q1

1303

5 Aug

M04

1304

5 Sep

M05

1305

5 Oct

M06/Q2

1306

5 Nov

M07

1307

5 Dec

M08

1308

5 Jan

M09/Q3

1309

5 Feb

M10

1310

5 Mar

M11

1311

5 Apr

M12/Q4

1312

The examples below show how you should add the 'tax year ending and PAYE month' to your Accounts Office reference.

To pay a future month or quarter

For example, to pay PAYE month 06 (quarter 2) of the year 2012-13 before 6 October you need to do the following:

  1. when the month number is a single digit add a zero in front (thus show month 6 as 06)
  2. add 1306 to your Accounts Office reference number to give 123PA000123451306 - this reference is only an example and should not be used to make a payment
  3. use the resulting 17-character reference number to make a combined PAYE tax and NICs payment

If you do not add 1306 and use your 13-character Accounts Office reference your payment will be automatically allocated to month 05 and not month 06.

To make a payment for a previous month or quarter

For example, to make a payment for PAYE month 09 (quarter 3), which you should have paid in January 2012-13, in March of 2012-13:

  1. when the month number is a single digit add a zero in front (thus show month 9 as 09)
  2. add 1309 to your Accounts Office reference to give 123PA000123451309 - this reference is only an example and should not be used to make a payment
  3. use the resulting 17-character reference number to make a combined PAYE tax and NICs payment

Note: You may still be liable to late payment penalties.

To pay a previous year

To make a payment for a previous year, for example the year 2011-12:

  • add 1213 to your Accounts Office reference to give 123PA000123451213 - this reference is only an example and should not be used to make a payment
  • always show the month as 13
  • use the resulting 17-character reference number to make a combined PAYE tax and NICs payment

If you add the wrong 'tax year ending and PAYE month' your payment will be incorrectly allocated and you may receive a reminder.

Check your HMRC Accounts Office reference number for a previous year payment

Payments and deadlines

Top

Direct Debit - how to set up

If you are signed up for HMRC's PAYE Online for employers service you can set up a Direct Debit for HMRC to collect your monthly or quarterly PAYE tax/Class 1 NICs payments (including CIS and Student Loan repayment deductions).

HMRC recommends that you pay your PAYE/NICs by Direct Debit. It’s safe and secure, available 24 hours a day and puts you in control, making it less likely that you’ll miss a payment deadline. You can also set-up a future payment as soon as you know how much is due - for example when the payroll run is completed.

Find out how to pay by Direct Debit now

Top

Online debit or credit card over using BillPay

If you have a debit or credit card from a UK card issuer, you can pay your PAYE tax/Class 1 NICs (including CIS and Student Loan repayment deductions) online using the BillPay service provided by Santander Corporate Banking.

If you pay by credit card you will have to pay a transaction fee of 1.4 per cent. HMRC does not accept American Express or Diners Club cards.

A BillPay payment takes up to three banking days to reach HMRC. Banking days are Monday to Friday excluding bank holidays.

To avoid interest charges and penalties on late payments HMRC provides guidance to help you decide when to make your payments.

PAYE/National Insurance payments and deadlines

Paying previous years

To make a payment for a previous year, for example 2011-12 you need to select:

  1. 2011-12 from the 'Tax year to pay' box
  2. Month 12 in the 'Month (period ended) to pay' box

The information about the tax year and month is essential and ensures that your payment goes to the correct year. If you do not add them to your Accounts Office reference, your payment will automatically go to the current deduction year instead.

BillPay is unable to accept 'Month 13' payments. Please use 'Month 12' instead.

Check your PAYE reference with the HMRC PAYE reference checker

Make a debit or credit payment now (Opens new window)

Top

Bank details for Bacs Direct Credit, Faster Payments online/telephone banking, or CHAPS

You can use your bank or building society services to pay by:

  • Bacs Direct Credit
  • Faster Payments by online or telephone banking
  • CHAPS

Setting up and making payments

To pay your PAYE tax/Class 1 NICs (including CIS and Student Loan repayment deductions) using any of these methods you'll need to set up the payment with your bank. You'll need to give them:

  • HMRC's bank account details
  • your Accounts Office reference number

Find out HMRC’s bank account details

Faster Payments

This is a service that has been introduced by the banking industry for sending online or telephone banking payments on the same day or next, providing the value of the payment does not exceed the value limit set by the sending bank.

More about the Faster Payments Service

Information about Faster Payment limits (Opens new window)

If you're late submitting your return or payment, you may be charged a penalty. Interest may also be charged.

PAYE/National Insurance payments and deadlines

Multiple or composite payments

If you are a very large employer, you may wish to make one payment to cover a number of schemes (called multiple or composite payments). If you think you would like to use this method, please contact the Accounts Office you normally deal with using the links below. They will then get back to you with further guidance.

Please do not use these links to ask for advice on anything other than CHAPS payments, as HMRC will not be able reply .

Contact HMRC's Cumbernauld Accounts Office

Contact HMRC's Shipley Accounts Office

Top

Paying at your bank by Bank Giro

If your bank or building society offers the Bank Giro service you can make a payment at your own bank branch by cheque or cash. This is more efficient and secure than sending a payment by post.

If paying this way please:

  • take your payslip from your payment booklet to your own bank branch (other banks may not accept it or may charge you for this service)
  • make your cheque payable to 'HM Revenue & Customs only' followed by your Accounts Office reference

Please allow at least three banking days for your payment to reach HMRC. Banking days are Monday to Friday excluding bank holidays.

When paying by Bank Giro you should only use official HMRC payslips. HMRC payslips contain the correct HMRC bank account information and ensure payment reaches your account on time.

To avoid interest charges and penalties on late payments HMRC provides guidance to help you decide when to make your payments.

PAYE/National Insurance payments and deadlines

Top

At the Post Office

You can make a payment of PAYE tax/Class 1 NICs (including CIS and Student Loan repayment deductions) at the Post Office by cheque, cash or debit card without charge. This is more efficient and secure than sending a payment by post. If paying at the Post Office this way please:

  • take your payslip from your payment booklet with you (or you will be charged for using this service)
  • make cheques payable to 'Post Office Ltd'

You should allow at least three banking days for your payment to reach HMRC. Banking days are Monday to Friday excluding bank holidays.

To avoid interest charges and penalties on late payments HMRC provides guidance to help you decide when to make your payments.

PAYE/National Insurance payments and deadlines

Top

By post

HMRC recommends that you pay your PAYE tax/Class 1 NICs (including CIS and Student Loan repayment deductions) payments electronically using one of the methods covered in this guide. If you use the right reference electronic payments are more efficient and secure than sending cheques by post.

If you do need to pay by post please:

  • make your cheque payable to 'HM Revenue & Customs only' followed by your Accounts Office reference
  • send your cheque and payslip to HMRC's using the pre-addressed envelope if you were sent one or use the address below
  • do not fold the payslip or cheque and do not fasten them together

Please allow at least three working days for the payment to reach HMRC. This allows for any delays in the post outside HMRC’s control.

If you do not have a pre-addressed HMRC envelope please send your payment and payslip to:

HM Revenue and Customs
Bradford
BD98 1YY

Postdated cheques

HMRC only accept a postdated cheque:

  • before your tax is due - if you send a cheque for the full amount and it arrives by the due date
  • after your tax is due - if you have an agreement with HMRC to pay with postdated cheques

HMRC have automated the way they deal with payments sent by post. So you need to send a covering letter with your postdated cheque. Otherwise HMRC won't know that the cheque is postdated and will present it straight away.

To avoid interest charges and penalties on late payments HMRC provides guidance to help you decide when to make your payments.

PAYE/National Insurance payments and deadlines

Top

Using the Government Banking Service

Employers such as government departments and health authorities who have an account with the Government Banking Service (GBS) can make payments of PAYE tax/Class 1 NICs (including CIS and Student Loan repayment deductions) using the GBS online service. This will transfer the funds direct to HMRC's GBS bank account.

Provided you initiate payment within the time specified by GBS, HMRC will receive payment on the same day.

Please take care if you need to enter HMRC's bank account details. If you make a mistake there may be a delay before your record is credited or your payment may not be received at all.

To avoid interest charges and penalties on late payments HMRC provides guidance to help you decide when to make your payments.

PAYE/National Insurance payments and deadlines

Your HMRC Accounts Office reference number

You will also need to provide your HMRC Accounts Office reference number with your payment.

Find out more about your Accounts Office reference number

Top

Telling HMRC if no PAYE tax/Class 1 NICs payment is due

If you don't let HMRC know you have no PAYE/NICs payment to make they may contact you asking for payment.

If you paid no employees in a tax month then you must send an Employment Payment Summary (EPS) to HMRC. The deadline for this is the 19th of the month following the end of the tax month for that pay period. Use the 'No payment due as no employees paid in this pay period' tick box on the EPS.

If you run your payroll more or less frequently than monthly then you still only need to submit one EPS in a tax month.

You'll find more about an EPS by following the link at the end of this section.

If you believe no payments will be due for several future months

At present you cannot tell HMRC in advance of future months where no payment is due. You should continue to report using the EPS each tax month. But see below for changes from April 2013.

From April 2013

If you anticipate that you will not be making any payments to employees for a period exceeding a tax month, then you should let HMRC know.

Tell HMRC that you will not be submitting an FPS or making monthly/quarterly payments for a future period by completing the 'Period of inactivity' fields on the EPS.

Sending payroll information to HMRC

Top

Checking HMRC have received your payment

If you use HMRC’s PAYE Online for employers service you can check that your payment has reached your account. All payments will be shown on your account within a few days of HMRC receiving them if you’ve given the right reference number.

If you send your payment by post, you will need to send a letter with your payment if you want a receipt. Please don't write on your payslip as they are processed automatically.

Read more on how to view your payments online

Top

Stopping your payment booklet if you no longer need one

If you pay at a bank by bank giro, at the Post Office or by cheque in the post you need a payment booklet. However you don't need one if you pay HMRC by any other method described in this guide.

You can tell HMRC online to stop issuing payment booklets by using the link to your HMRC Accounts Office below.

Stop the issue of a payment booklet (Cumbernauld)

Stop the issue of a payment booklet (Shipley)

Top

What to do if you don't have a payslip

HMRC recommends that you make your payments electronically using one of the methods covered in this guide. Electronic payments are more efficient and secure than sending payment by post.

If you are paying by post and you don't have a payslip, you should send these details with your payment:

  • company name
  • address
  • telephone number
  • Accounts Office reference number
  • the month and deduction year you're paying
  • the amount of PAYE tax/Class 1 NICs (including CIS and Student Loan repayment deductions) you are paying

Top

Advance funding for PAYE payments

If you need to make a tax refund or provide statutory payments (Statutory Sick Pay, Statutory Maternity Pay etc) to one or more of your employees, you can fund this by reducing your monthly or quarterly payments to HMRC by the amount of refund(s) or statutory payments. Payments that you can reduce for this purpose are:

  • PAYE tax/Class 1 NICs
  • CIS deductions
  • Student Loan repayment deductions

You must however advise HMRC that you have done this by completing an EPS to show the amount recovered and any NICs compensation. If you do not do so, HMRC will be unable to deduct your funding from your PAYE payments, and will expect payment of the full amount of your PAYE as shown in the FPS.

If your payment to HMRC for the same period isn't sufficient to cover the tax refund(s), you can either:

  • reduce your next monthly or quarterly payments to make up the balance and again you will have to complete an FPS or EPS to show the amount recovered and any NIC compensation
  • apply to HMRC for funding to cover the balance - see the link at the end of this section

If, as a result of tax refunds or statutory payments, you have no payment to make to HMRC in a given month or quarter you will need to follow the instructions in the earlier section 'Notifying HMRC if no PAYE tax/Class 1 NICs payment is due' and submit a FPS and/or EPS as appropriate.

Help with statutory payments funding

Top

More useful links

PAYE/National Insurance payments and deadlines

What happens if you can't pay

How to pay Class 1A National Insurance

How to pay PAYE Settlement Agreement payments

If you've overpaid or underpaid HMRC in error

Top