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Spondoo Accounting

A GUIDE ON HOW TO SET UP A DIRECT DEBIT FOR PAYE

January 9, 2023

The HMRC website provides detailed instructions on how to set up a direct debit for PAYE.

It is quite simple to set up a direct debit with HMRC, but it is something that the employer must do rather than agents, due to signatory on the bank account.

How to

  • First, it is important to make sure you are registered with HMRC to pay PAYE by direct debit.
  • To set up a direct debit for PAYE, you’ll need to register for HMRC’s online service by opening an Online Employers Account. You can do this by visiting the Get Started page on the HMRC website.
  • There is a link to create one at the bottom of the page that the link leads you to: Either sign up as an organisation or an individual.
  • Once you’re registered and logged in, you can follow the onscreen instructions to set up your direct debit. Navigate to the “set up a Direct Debit” from the ‘Manage your Tax’ tab to add your bank account information.
  • HMRC will then provide you with a Direct Debit Instruction (DDI) to complete. This will require you to provide your bank details, including the bank account number, sort code, and the name of the account holder.
  • Once the DDI is completed, you should send it to HMRC, along with a cheque for PAYE due. HMRC will then set up the direct debit and send a confirmation letter to you.
  • When the direct debit is set up, HMRC will collect the agreed amount from your bank account on the same day each month. You will be sent an email to confirm that the money has been taken.

It is important to note that the amount taken may be different each month, as it is based on the amount of PAYE that you owe. You should keep a record of the payments made and make sure that the bank account you have set up the direct debit from has sufficient funds to cover the payments.

If you need to change the bank account that the direct debit is taken from, you will need to contact HMRC and provide them with the new bank details.

By following these steps, you will be able to set up a direct debit to pay your PAYE and ensure that you do not miss any payments.

Note

You need to register for PAYE online. This will give you access to the HMRC’s secure online service to set up and manage your direct debit. To do this, you’ll need your Government Gateway user ID and password.

Conclusion

To set up a direct debit for PAYE, you must first register with HMRC and complete a Direct Debit Instruction (DDI) form with your bank details. This should then be sent to HMRC along with a cheque for PAYE due. Once set up, the agreed amount will be collected from your bank account on the same day each month. If you need to change the bank account, you should contact HMRC with the new details.

For more information about setting up a direct debit for PAYE, please refer to the HMRC’s guide on the topic, which can be found here: https://www.gov.uk/pay-tax-direct-debit.

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Information provided on the site is merely guidance that may change in line with UK law and regulations. Users must not consider this to be financial advice or their sole resource when making any financial decision. Spondoo is a trading name for Accounting SQL Limited, authorised & license accounting firm under the Institute of Financial Accountants.
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