ICAEW’s Tax Faculty has published guidance to support employers who are struggling to ensure their payments to HMRC are being correctly allocated.
Following feedback from members that payments of PAYE and employment-related NIC can be misallocated by HMRC, the Tax Faculty has outlined the steps that employers need to take to help to ensure the funds are correctly assigned.
In TAXguide 18/21, which is freely available, the faculty highlights that HMRC has two bank accounts for employer payments and confirms which types of payments need to be made to which account.
It goes on to describe how to ensure that payments must include the correct reference numbers for payments of:
- PAYE;
- Class 1A: Benefits-in-kind and expenses reported on form P11D(b);
- Class 1B: PAYE settlement agreements; and
- PAYE late payment or filing penalties.
These reference numbers are between 13 and 17 characters long, and the guide highlights that some online banking services do not allow for references that are 17-characters long. The faculty explains that to resolve this problem, employers may need to change bank accounts.
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