Newsletter Spring 2017

Pay PAYE electronically

Do you still pay your PAYE by cheque? If so, you may have received a letter or call from HMRC asking you to switch to online or telephone banking, or to pay by debit or credit card.

We agree with HMRC that electronic payments are safer and more secure than sending a cheque through the post, as it avoids the risk of the physical cheque being intercepted and fraudulently cashed. However, electronic payments are also at risk of misdirection if you make a mistake when typing the bank details or payment reference.

The easiest way to pay VAT is to set up a direct debit. This allows HMRC to take the amount due from your business bank account 10 days after the end of the month that follows the VAT quarter. The correct amount of VAT will be collected on time each quarter, if there are sufficient funds in the account, until you cancel the direct debit.

However, you need to set up a new direct debit for each PAYE payment due, using the 13-character accounts office reference number, and enter the year and month for the particular payment. This is not worth the hassle.

You need to remember to pay the PAYE due by the 22nd of each month, if you pay electronically, or by the 19th of each month if paying by cheque. Not all banks will allow an advance payment to be scheduled for a weekend or bank holiday, in which case the payment must be made on the preceding Friday.

If your business pays less than £1,500 in PAYE per month, you can ask to pay the PAYE quarterly. We can make this request for you.