HMRC has introduced a new direct debit payment plan where employers will be able to pay their employees PAYE and national insurance contributions on a recurring basis.

Traditionally, employers have only been able to make single payments via direct debit. The scheme will come into effect from 3 October 2022 and has been hailed as a ‘great step forward’ by industry bodies.


How to set up a direct debit payment plan for PAYE

HMRC has confirmed that this service will be available to employers via their business tax account, their employers’ PAYE service or through Pay employers’ PAYE.

From 3 October, you will be able to see a new ‘set up a direct debit’ link in your business tax account and the employers’ liabilities and payments screens on the employers’ PAYE service.

From here, you will be able to set up a direct debit instruction. This will authorise HMRC to directly collect from your account based on your return submissions. Once this has been authorised, the link will change to ‘manage your direct debit.’ Here you will be able to change or cancel the direct debit whenever you wish.

The Institute of Chartered Accountants in England and Wales’s Tax Faculty has confirmed that the direct debit will never be more than the number declared on Real Time Information (RTI) returns and can never be more than £20m. They have also stated that the money will be taken out on the 23rd of each month or the next working day – and there will be no additional charge for the employer to use the payment plan.

Please note that PAYE direct debits are only available to employers. Agents will not be able to set up direct debits on behalf of their clients.

If you have any questions or would like further information about HMRC’s new direct debit payment plan, please get in touch and we’ll be happy to help.


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