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Variable Direct Debits for PAYE payments

From the 19th September 2022, employers have been able to set up a variable direct debit scheme for paying PAYE liabilities meaning no more manual PAYE and national insurance payments to be made each month/quarter to HMRC. The current system only allows a single payment to be made by direct debit.

What amount will be taken and when ?

The direct debit amount taken will be the figure declared on the return submitted by the employer or payroll agent, this will also take into consideration any over payments to be applied.

The amount taken will never be greater than the amount declared on the return. The direct debit will be taken on the 23rd of the month (or the next bank working day) and a notice will be sent to the employer 3 days before of the amount being collected.

Through the variable payment plan the following charges will be able to be collected on receipt of the returns:

  • Full Payment Submission
  • Employer Payment Summary
  • Class 1A National Insurance
  • Construction Industry Scheme
  • Apprenticeship Levy
  • Earlier Year Update

How is it set up?

Only the employer will be able to set up the direct debit scheme as it is not available for agents yet. The service can be accessed through Pay employers’ PAYE or directly through the business tax account and employers PAYE service.

A new link will be added to the business tax account and employers PAYE service which will allow you to ‘set up a direct debit’

This will then allow employers to set up a direct debit instruction to collect the amount from their bank based on the returns submitted.

You will be able to change or cancel the direct debit through the ‘manage direct debit’ section.

Post by dhpaymin