Payroll operators need to be sure they hit the August electronic payment deadline, effectively a day earlier than normal, as this month it falls on a weekend, Saturday 22 August or they will be issued with an HMRC late payment penalty
To make sure the payment for that month reaches HMRC on time, the cleared funds need to be in HMRC’s account by 21 August unless the company is able to arrange a Faster Payment to clear on or by the payment deadline.
HMRC is advisings companies to check with their bank or building society well in advance of making August’s payment to ascertain single transaction, daily value limits and cut off times.
In its Employer Bulletin, which covers payroll issues, HMRC reminds companies that it is their responsibility to make sure payments are made on time, and that late payments may result in interest charges and/or a late payment penalty.
There is also a warning that HMRC has seen an increase in the number of employers supplying an incorrect reference number, getting the additional four digits the wrong way round in some cases, with the result that payments may be allocated to the incorrect period. Tax year followed by the tax month is the right order.
For companies paying on time, all that is required is the 13 character Accounts Office Reference. For those paying HMRC exceptionally early or late, which is defined as more than 14 days earlier than payment is due or 14 days later, it is necessary to add the extra four digits to the end of the Accounts Office reference which indicate the tax year and tax month being paid.
For example, making a late payment for the month ended 5 May 2015 (2015-16 month 1) the payment reference should be the 13-character Accounts Office reference followed by 1601. All 17 characters should be entered without any spaces.
Without this information, HMRC says payment could be allocated to another tax month or charge. The guidance also cautions that once a company has paid using the 17 character reference, it is important to change the four digits in following month, otherwise the payment will be directed towards the same month as before.
The August issue of the Employer Bulletin is here
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