On 19 September, a new direct debit system for PAYE and national insurance contributions payments will come into effect in the UK. This means that you can now set up a direct debit with HMRC, which will then collect the money from your account.
This is a convenient way to ensure that your tax and NI contributions are paid on time and means that you won't have to worry about making a payment each month.
If you want to take advantage of this system, you will need to set up a direct debit mandate with HMRC. You can do this by logging into your HMRC online account, or by calling the HMRC contact center.
Once you have set up a direct debit, HMRC will collect the money from your account on the 23rd of each month.
You will see the "set up a direct debit" option on your business tax account on HMRC`s website. then HMRC will be authorised to collect money from your business bank account based on your RTI submissions.
Direct debit won`t be more than your RTI (Real Time Information) submission and a cap of £20m. There won`t be any additional charge.
Although there are still surrounding questions about the new system like "why student loan" submission isn`t being mentioned separately, or the reason why CIS is under an individual category, the Institute of Chartered Accountants recommends keeping an eye on each direct debit and raising disputes if it`s not included your intended RTI submission.
As part of HMRC`s digitising tax reforms such as MTD for VAT, PAYE direct debits are surely a flag-holder development for many employers.
If you have further PAYE or national insurance contribution worries, feel free to contact us to have chat with our accountants.
