PAYE Deadline – All You Need to Know About Paying HMRC PAYE

With so many dates and bills to remember swirling around the heads of business owners, you can be forgiven for occasionally forgetting the PAYE deadline.

Beware though, that late PAYE payment can incur penalty charges from HMRC and quickly become troublesome. Luckily though, PAYE due dates are the same each time, and thus easier to remember.

What is the PAYE deadline?

The PAYE deadline always lands on the 22^nd.

• For those that pay monthly, the PAYE deadline will be the 22^nd of the next tax month.
• For those that pay quarterly, the PAYE deadline will be the 22^nd of the last tax month of the quarter.

HMRC often refer to tax months rather than normal months. These run from the 6^th of one month, to the 5^th of the following month. E.g. the first tax month of the year is 6^th April to 5^th May, the second tax month is 6^th May to 5^th June, and the third tax month is the 6^th June to 5^th July, etc.

Keep in mind that the payment method you choose may change the date you can pay by in order to meet this deadline. Read on to find out the differences.

What is the PAYE deadline for businesses that pay quarterly?

Like HMRC’s tax months, HMRC’s quarters also begin from the 6^th of each month, beginning the tax year from 6^th April.

PAYE deadlines for businesses that pay quarterly –

• Quarter 1 – 22^nd June
• Quarter 2 – 22^nd September
• Quarter 3 – 22^nd December
• Quarter 4 – 22^nd March

How do I pay quarterly?

Paying PAYE quarterly is an option for any business that expects their average monthly payments to be below £1,500. In fact, unless you notify HMRC that you’d like to pay monthly instead, they’ll automatically enrol you onto a quarterly payment scheme if you qualify.

Methods of paying PAYE bills

As you might expect, HMRC are keen to have businesses pay their PAYE bills promptly, and as such, have made it easy to do so. Whether it’s by card, Bacs, telephone, CHAPS, direct debit, cheque, online banking, or even good old-fashioned cash, businesses can settle their bills quickly and easily with HMRC.

How you decide to pay HMRC will have a bearing on when you’ll need to take action to ensure you pay up by the PAYE deadline.

All the following payment methods can be completed on the same day as the PAYE deadline –

• Online bank transfer
• Telephone banking
• CHAPS

You’ll need to pay at least three working days before the PAYE deadline if you choose to use any of these methods –

• Direct debit
• Bacs
• Debit card
• Business credit card
• Cash via building society
• Cheque via building society
• Cheque via post

Allow for at least five working days before the PAYE deadline for this method –

• Direct debit (if you haven’t set one up to pay HMRC before)

What happens if I miss the PAYE deadline?

Thankfully, not a great deal, providing that it’s the first time you’ve missed it. HMRC will allow you to miss the PAYE deadline once per tax year without classing it as a default.

Miss your PAYE deadline again, however, and you’ll begin to incur financial penalties.

• Two or three defaults in a single tax year will add 1% daily interest onto the amount outstanding.
• Four to six defaults sees 2% daily interest added
• Seven to nine defaults sees 3% daily interest added
• Ten or more defaults sees 4% daily interest added

If either a monthly or quarterly payment still hasn’t been paid in full after six months, an addition 5% of the outstanding balance will be added to your bill.

Am I able to appeal against a late payment penalty?

Yes. Contact HMRC’s PAYE for Employers service to talk through your options if you feel you’ve been charged unfairly.

There are several reasons for late payments that HMRC will consider reasonable enough to cause a default. They’ll take into account IT problems, theft, bereavement, sickness, natural disasters and other reasons, and maybe even allow you to spread overdue payments across a payment plan.

If you think you may need to negotiate a monthly repayment plan with HMRC, you’d be well-served to enlist the help of a business rescue specialist to increase your chances of securing one.

HMRC don’t allow for outstanding debts to be paid over instalments easily, and if your business has already defaulted several times, they may be even more hesitant to set up a payment plan for you.

At Forbes Burton, we’ve had years of experience dealing with HMRC issues, and know exactly what they’re looking for before they offer alternative payment arrangements. It’s strongly suggested that any company in trouble get in touch with us before debts spiral out of control. We may be able to arrange an affordable tax repayment plan with HMRC on your behalf to get you back on track.

Does my business need to use PAYE?

If your business employs anybody earning £116 or more a week then you’ll need to use PAYE. You may also have to use PAYE if any of your employees have another job, claim expenses, or receive pension contributions from you.

If you’re unsure how to calculate what will need to be paid, the easiest option is to opt for payroll software which calculates every aspect of your employees’ wages for you. As long as the data you enter is correct, these platforms will send thorough and accurate PAYE reports over to HMRC on your behalf.

Is your business struggling with PAYE payments?

If you think your business might default on its PAYE payments, it’s a good idea to get in touch with us before the situation becomes unmanageable. We’ve helped countless companies to navigate difficult financial situations with our years of experience in business recovery.

If you need to get some advice on what you can do to get your finances back on track, give one of our expert advisors a call. We offer free, no-obligation advice for any type of business. Simply call us on 0800 975 0380 or email [email protected]