COMPLIANCE
Using the right PAYE reference when making payments to HMRC
Myrtle Lloyd, director general for customer services in Her Majesty’s Revenue and Customs (HMRC), shares a reminder on the importance of getting pay as you earn (PAYE) payment reference numbers right, saving time for payroll professionals and businesses
M yrtle said: “Since joining HMRC last year as director general for customer services, I’ve been really passionate about transforming our services for customers, while also making everyday interactions as quick and easy as possible. I know making PAYE payments is something that all employers are familiar with, so I’d like to share some helpful advice on how you can ensure you get it right every time. When making PAYE payments to HMRC, it’s important you check payment reference numbers are right, otherwise payments might not be recognised. Unfortunately, this can lead to penalties and charges being issued to customers even if they’ve paid on time, which they’ll need to call us about to correct. You may already be aware that payment reference numbers are specific to the type of tax and the accounting period the payment is for. The characters in the payment reference number tell us where to allocate payments, to help us process payments as quickly as possible. One of the common issues we’ve found is that online banking services may default to a previous payment reference, so you should check this is right each time a payment is made, to avoid a delay in the payment, or it not being recognised at all. To find the correct reference number, search ‘pay PAYE’ on GOV.UK and use our ‘pay now’ tool. Thank you for continuing to support us and your customers, particularly those who are new to PAYE or less familiar with how to pay.” Paying PAYE – where to find the correct reference If customers are paying on time for
the current period, they’ll need to use their 13-character accounts office (AO) reference. They can find this on: ● the letter HMRC sent when they first registered as an employer ● the front of their payment booklet ● the letter from HMRC that replaced the payment booklet ● their business tax account, if they’ve already added employer PAYE enrolment to it – they can search ‘business tax account’ on GOV.UK to sign in. If they’re not paying for the current period, customers will need to add four extra characters to the end of their accounts office reference If they’re not paying for the current period, customers will need to add four extra characters to the end of their AO reference. These final four characters will show the year and the month, or quarter, a payment is for. They’ll need to enter all 17 characters without any spaces. ● characters 14 and 15 are for the tax year. For example, 22 for the tax year from 6 April 2021 to 5 April 2022, or 23 for the tax year from 6 April 2022 to 5 April 2023 ● characters 16 and 17 are for the tax month or quarter, depending on how customers pay – they can use the ‘pay now’ tool on GOV.UK to find out which
characters to use. Each tax period has a different payment reference number, so it’s important they make separate payments for each period.
If customers make monthly payments
Payment period
Tax month
01
6 April to 5 May
02
6 May to 5 June
03
6 June to 5 July
04
6 July to 5 August
05
6 August to 5 September
06
6 September to 5 October
07
6 October to 5 November
08
6 November to 5 December
09
6 December to 5 January
10
6 January to 5 February
6 February to 5 March
11
6 March to 5 April
12
If customers make quarterly payments
Payment period
Tax month
6 April to 5 July
03
6 July to 5 October
06
6 October to 5 January
09
6 January to 5 April
12
For example, to pay for the month ending 5 June 2022 (month 2 of the 2022/23 tax year), customers should add the four extra characters 2302 to the end of their AO reference – 23 to tell us it’s for the tax year ending 5 April 2023 and 02 to tell us it’s for month 2. n
To find further help and support, search ‘pay PAYE’ on GOV.UK.
| Professional in Payroll, Pensions and Reward | July - August 2022 | Issue 81 18
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