As reported previously in Employer Focus, since October 2022 employers have had the option to pay their PAYE via variable direct debit. Since then, HMRC have notified employers that they need to allow extra time to set up any new variable direct debits.

HMRC’s guidance indicates that a PAYE direct debit should be set up at least six working days in advance of the payment due date.  However, for March and April, HMRC have recommended that employers allow extra time – meaning that direct debits for amounts due on or after 22 April need to be set up by 12 April at the latest. HMRC have not issued any indication as to whether the extended deadline will apply to PAYE collections from May onwards.

HMRC have said that these deadlines are earlier than they would like, and they are working to shorten them.  However, this will take time.  Employers are therefore advised to ensure they continue to leave sufficient time whenever attempting to set up a direct debit.

As reported in January’s Employer Focus, other teething problems with the new direct debit scheme mean that employers may receive both inappropriate interest charges and late payment notifications.  Interest charges will be removed once the payment is processed.  Again, HMRC are working to fix their systems, but this could take some time.

Further information is available from HMRC at setting up a variable direct debit.

 

This article reflects the position at the date of publication (14 March 2023). If you are reading this at a later date you are advised to check that that position has not changed in the time since.    

We regularly publish articles on a range of tax and wider topical issues which affect employers. If you wish to subscribe to our monthly Employer Focus e-newsletter, please contact us.