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John M Taylor & Co | Accountants Paisley/Taxation/Vat Returns/Business Start Ups/Sage/Payroll/Bookkeeping

Electronic PAYE Payments

HMRC are reminding employers to be careful that PAYE payments made electronically have been cleared into HMRC’s bank account by the due date.  Many employers have taken advantage of the electronic payment option which generally gives a later payment date of 22nd of the month. However HMRC are stressing that where the 22nd falls on a non banking day (weekend or Bank Holiday) that the payment may need to be made earlier to ensure that HMRC has cleared funds by the due date. HMRC need to have received cleared funds by the last bank working day before the 22nd.

HMRC use the following example:

‘For example: 2010/2011 PAYE month 9 for period ended 5 January 2011.

The due date of 22 January 2011 falls on a Saturday (non banking day), so if you are paying electronically your PAYE payment must clear HMRC’s bank account by Friday 21 January 2011. You may therefore need to change your payment date to ensure you pay on time. If you do not do so, you will be noted as paying late, and late payments for this tax year may result in a penalty being charged.’

This HMRC example may be too late for those making electronic payments for January 2011 however the next time the 22nd falls on a non banking day is May 2011. Cleared funds must reach HMRC’s bank account by Friday 20th May 2011.

HMRC may, for the first time, issue penalties to any employer who makes late payments of PAYE more than once for 2010/11. These penalty notices will not be issued until after the end of the tax year.

Internet links: HMRC guidance payment deadlines late payment penalties

Posted - 03/02/2011

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