Health and safety on ships

Overview

Operators of seagoing ships or small commercial vessels must protect the health and safety of workers by:

following safety standards and codes of practice

ensuring the safety of machinery and equipment

making sure the vessel is safely manned and all workers have the necessary qualifications

having the right emergency procedures and equipment

providing health protection and medical care

doing regular risk assessments

supplying necessary protective clothing and equipment

monitoring maritime safety information broadcasts

consulting with workers or their representatives on health and safety matters

Providing health and safety training

Workers must get basic health and safety training. There’s more information on what this covers on the Health and Safety Executive (HSE) website.

Written health and safety policy

The ship must must have a policy that sets out how health and safety will be managed. Read guidance on writing a health and safety policy.

Risk assessments

Regular risk assessments must be carried out to see how accidents, injuries or illnesses could be caused on the ship and what can be done to reduce the chances of them happening.

Risk assessments must be reviewed every year and whenever there are significant changes to either the ship or working activities.

Read chapter 1 of the ‘Code of safe working practices for merchant seafarers 2018’ for the basic requirements for risk assessments on board ships.

Read the ‘Merchant Shipping and Fishing Vessels (Health and Safety at Work) Regulations 1997’ for the requirements for risk assessments on merchant ships.

Safe working practices

Code of safe working practices

By law, up-to-date copies of the ‘Code of safe working practices for merchant seamen’ must be carried on a UK ship that’s not a fishing boat or pleasure craft.

A copy of the code must be available to any seaman who requests it.

The ‘Code of safe working practices for merchant seamen (Consolidated edition 2011)’ is available to buy from The Stationery Office.

Read the ‘Merchant Shipping and Fishing Vessels (Health and Safety at Work) Regulations 1997’ for safety standards and requirements for merchant ships.

Safety signs

Certain health and safety signs must be displayed on ships, such as emergency escape signs or danger warning signs. Signs must meet legal requirements if they’re permanently displayed.

Read the ‘Merchant Shipping and Fishing Vessels (Safety Signs and Signals) Regulations 2001’ to find out how and where safety signs and signals must be displayed.

‘Permit to work’

The ‘permit to work’ system reduces the risk of accidents on board ship. Under this system, seafarers must get written permission from a senior officer before they can perform hazardous tasks, like:

working aloft and outboard

working with boilers

‘hot work’ (work which could result in the ignition of flammable material, for example welding)

working in unmanned machinery spaces

entry into enclosed spaces

electrical testing

Read about using ‘permit to work’ schemes to test electrical systems.

Read ‘Safety Preparations Prior to Machinery Maintenance’ to find out how to prepare for doing maintenance on machinery on ships.

‘Permit to work’ templates

Protective equipment

Workers must be given suitable protective equipment if performing dangerous tasks.

You should only use protective equipment when risks cannot be avoided or reduced to an acceptable level by safe working practices. This equipment should:

meet the required standards

be a correct fit for the worker or adjustable

be compatible with any other equipment the worker has to use

be easily accessible, properly stored and maintained

be provided free of charge (unless it’s also used outside the workplace)

Read the ‘Merchant Shipping and Fishing Vessels Personal Protective Equipment Regulations’ to find out about personal protective equipment.

Noise and vibration

Risk assessments must be carried out to identify who is at risk from noise or vibration on a ship and what can be done to reduce or remove these risks.

Workers must be told about:

the nature of noise or vibration risks

how to eliminate or reduce the risks from noise or vibration

the correct use of any protective equipment

how to detect and report signs of injury

The Maritime and Coastguard Agency (MCA) provides information on controlling the risks of noise and vibration at sea.

Read the:

code of practice for controlling risks due to noise and vibration on ships

guidance on mitigating against the effects of shocks and impacts on small vessels

You may be able to get an exemption from the noise and vibration requirements.

Find out how to apply for an exemption from the:

control of vibration at work regulations

control of noise at work regulations

Small commercial vessels

Small commercial vessels must have safety measures in place for workers, such as:

bulwarks, guardrails or wire around the working deck to stop people falling overboard

safety harnesses for anyone working on deck

a means of securing the lifelines of safety harnesses

non-slip deck surfaces

Smaller commercial vessels (under 24 metres) must comply with the ‘Small commercial vessels codes’ to ensure the health and safety of workers on board.

Seagoing passenger vessels

Domestic passenger ships

Seagoing domestic passenger ships, for example ferries, must meet minimum safety requirements regarding:

general safety management policies

manning levels

proper and stable construction

carriage of safety equipment

pollution prevention

A passenger ship is a ship of any description that carries more than 12 passengers. There are various safety standards for seagoing passenger ships. Local Maritime and Coastguard Agency (MCA) Marine Offices have more information on these standards.

International passenger ships

Passenger ships which operate internationally must follow international conventions, such as the:

International Convention for the Safety of Life at Sea

International Convention on Load Lines

International Convention for the Prevention of Pollution from Ships

Local MCA Marine Offices have information on which safety standards apply.

Safety on vessels on inland waters

Passenger vessels operating on inland waters - like estuaries, lakes and rivers and canals - must follow safety standards and requirements.

Inland waters or inland waterways are known legally as ‘categorised waters’. These waters are defined and listed in Merchant Shipping Notice (MSN) 1827 (as amended) Categorisation of Waters.

A passenger ship is a vessel that carries more than 12 passengers.

The rules for passenger ships built since April 2010, and operating in UK categorised waters are in ‘Merchant Shipping Notice 1823 (M) - Safety Code for Passenger Ships Operating Solely in UK Categorised Waters’.

The rules for older passenger ships are covered by several different sets of regulations. Contact the local  Maritime and Coastguard Agency (MCA) Marine Office for details.

Vessels that carry no more than 12 passengers

Safety standards and best practice guidance for these vessels are set out in the Inland Waters Small Passenger Boat Code.

Marine engineering

Marine engineering involves the design, construction, installation, and operation of systems and equipment that help to move and control ships. Safety measures must be in place for any crew members using or maintaining marine engineering equipment, such as:

switchboards and computerised equipment

machinery installations

boilers and emergency equipment

The Maritime and Coastguard Agency (MCA) provides information on the safe installation and use of marine engineering.

Fire prevention

The Maritime and Coastguard Agency (MCA) provides information on requirements for fire protection, fire detection and fire extinction on board ships.

The rules depend on the size of the ship.

Requirements for large ships are in the Merchant Shipping (Fire Protection: Large Ships) Regulations 1998.

Requirements for small ships are in the Merchant Shipping (Fire Protection: Small Ships) Regulations 1998.

You should also read the Merchant Shipping (Fire Protection) Regulations 2003 – it includes amendments to the regulations for large and small ships.

Contact the MCA to find out more about fire prevention and detection at sea.

Safety in ports

Health and safety measures must be in place to ensure the safety of  workers while in a port.

There is a range of publications and guidance on health and safety in ports on the Health and Safety Executive website.


Employment Allowance

What you'll get

Employment Allowance allows eligible employers to reduce their annual National Insurance liability by up to £4,000.

You’ll pay less employers’ Class 1 National Insurance each time you run your payroll until the £4,000 has gone or the tax year ends (whichever is sooner).

You can only claim against your employers’ Class 1 National Insurance liability up to a maximum of £4,000 each tax year. You can still claim the allowance if your liability was less than £4,000 a year.

Check if you're eligible

You can claim Employment Allowance if you’re a business or charity (including community amateur sports clubs) and your employers’ Class 1 National Insurance liabilities were less than £100,000 in the previous tax year.

You can also claim if you employ a care or support worker.

You can claim Employment Allowance for the previous 4 tax years dating back to the 2017 to 2018 tax year. Some of the rules for claiming are different.

If you’re part of a group

If you’re part of a group of charities or companies (also known as connected companies), the total employers’ Class 1 National Insurance liabilities for the group must be less than £100,000.

Only one company in the group can claim the allowance.

If you have more than one payroll

If you have or had more than one employer PAYE reference, the total employers’ Class 1 National Insurance liabilities for your combined payrolls must be less than £100,000 in the previous tax year

You can only claim Employment Allowance against one of the payrolls.

Off-payroll salary payments

Do not include employers’ Class 1 National Insurance liabilities on payments you make to off-payroll workers in your calculations. These are known as deemed payments. They do not count towards the £100,000 threshold.

Check if de minimis state aid rules apply to you

If you make or sell goods or services, Employment Allowance counts as ‘de minimis state aid’. There’s a limit to how much de minimis state aid you can get.

You must:

check that you’re within the de minimis state aid threshold

work out how much de minimis state aid you’ve received

You must do this even if you do not make a profit.

You do not have to do this if you do not make or sell goods or services, for example you’re a charity, an amateur sports club or if you employ a care worker.

Check you’re within the de minimis state aid threshold

Employment Allowance counts towards the total de minimis state aid you’re allowed to get over a 3 year period.

You must make sure you will not exceed the de minimis state aid threshold for your sector.

De minimis state aid and the relevant thresholds are worked out in euros.

Sector | De minimis state aid threshold over 3 years

Agriculture products sector | €20,000

Fisheries and aquaculture sector | €30,000

Road freight transport sector | €100,000

Industrial sector  / other | €200,000

Work out how much de minimis state aid you’ve received

Check if you’ve received any de minimis state aid - if so, you should have been told in writing.

Add the total amount of de minimis state aid that you’ve received or been allocated for the current and past 2 tax years.

Add this to the full amount of Employment Allowance for the year you’re claiming for. You’ll need to convert this into euros using the exchange rate for the end of the previous tax year. If you’re claiming for 2020 to 2021, you’ll need to use the exchange rate on 30 March 2020: £1 to €1.1249.

If the total is below the threshold for your sector, you’re eligible to make a claim.

If you’re a connected company, the total de minimis state aid for all of the companies in the group must be below the de minimis state aid threshold for your sector.

The rules are different if your business covers more than one sector.

Who cannot claim Employment Allowance

You cannot claim if you’re a public body or business doing more than half your work in the public sector (such as local councils and NHS services) - unless you’re a charity.

You also cannot claim if both of the following apply:

you’re a company with only one employee paid above the Class 1 National Insurance secondary threshold

the employee is also a director of the company

Certain employees cannot be included in your claim, such as:

someone whose earnings are within IR35 ‘off-payroll working rules’

someone you employ for personal, household or domestic work (like a nanny or gardener) - unless they’re a care or support worker

How to claim

How you claim depends on whether you use your own payroll software or HMRC’s Basic PAYE tools.

If you use your own software

To claim through your payroll software, put ‘Yes’ in the ‘Employment Allowance indicator’ field next time you send an Employment Payment Summary (EPS) to HM Revenue and Customs (HMRC).

If your payroll software does not have an Employment Payment Summary field, you can use Basic PAYE Tools.

Select your business sector under ‘de minimis state aid rules’

You must select the business sectors that apply to you, even if you do not make a profit.

Most businesses will need to select the ‘Industrial/other’ category, for example a hair salon or restaurant.

If you do not make or sell goods or services, choose ‘State aid rules do not apply’. For example if you’re a charity, an amateur sports club or if you employ a care worker.

If you use HMRC’s Basic PAYE Tools

Select the correct name in the ‘Employer’ menu on the home page.

Select ‘Change employer details’.

Select ‘Yes’ in the ‘Employment Allowance indicator’ field.

Answer ‘Yes’ to the ‘Do state aid rules apply?’ question if you sell goods or services. Select the business sectors that apply to you. Otherwise, answer ‘No’ and select ‘State aid rules do not apply’.

Send your EPS as normal.

Stopping your claim

If you stop being eligible, select ‘No’ in the ‘Employment Allowance indicator’ field in your next EPS.

Do not select ‘No’ just because:

you’ve reached the £4,000 limit before the end of the tax year - this does not make you ineligible

you’re no longer employing anyone -  this allowance will stop at the end of the tax year

If you stop your claim before the end of the tax year (5 April), any allowance you’ve been given that year will be removed. You’ll have to pay any employers’ (secondary) Class 1 National Insurance due as a result.

When to claim

You need to claim Employment Allowance every tax year.

You can claim at any time in the tax year, but the earlier you claim the sooner you will get the allowance.

If you claim late and do not use your Employment Allowance against your employers’ Class 1 National Insurance liabilities, you’ll have to ask HMRC to do one of the following:

use any unclaimed allowance at the end of the year to pay any tax or National Insurance you owe (including VAT and Corporation Tax if you do not owe anything on your PAYE bill)

give you a refund after the end of the tax year if you do not owe anything

You can see how much Employment Allowance you’ve used in your HMRC online account.

Claiming for past years

You can claim Employment Allowance for the previous 4 tax years, dating back to the 2017 to 2018 tax year.

To claim for past years, it does not matter how much your employers’ Class 1 National Insurance liability was or how much de minimis state aid you received.

The thresholds for employers’ Class 1 National Insurance and de minimis state aid do not apply.

Employment allowance was £3,000 each year between April 2016 and April 2020.

Further information

Read ‘Claiming Employment Allowance: further employer guidance’ for more information.

After you've made a claim

You can begin using your Employment Allowance as soon you submit your claim.

HMRC will not send you a confirmation letter for your Employment Allowance.

If your claim is rejected, you will receive an automated message from HMRC within 5 working days.

You may need to tell HMRC if last year’s employers’ Class 1 National Insurance liabilities included deemed payments, taking you over the £100,000 threshold.

When your Employment Allowance counts as de minimis state aid

If you have selected a business sector in your claim, HMRC will send a letter stating that your Employment Allowance counts as de minimis state aid.

You must keep this letter as you may need it if you apply for other de minimis state aid.


Find payroll software

Overview

If you decide to run payroll yourself, you need payroll software to report to HM Revenue and Customs (HMRC). The software will help you with tasks like:

recording your employees’ details

working out your employees’ pay and deductions

reporting payroll information to HMRC

working out how much you need to pay HMRC

calculating statutory pay, for example maternity or sick pay

HMRC-recognised software

HMRC tests payroll software to check it can report PAYE information online and in real time (RTI).

You can choose from free payroll software (if you have fewer than 10 employees) and paid-for software that has been tested and recognised by HMRC.

You should consider which features you need. For example, some software will not let you:

produce payslips

record pension deductions

make pension payments

pay different people over different periods (for example both weekly and monthly)

send an Employer Payment Summary (EPS) report or Earlier Year Update (EYU) to HMRC

HMRC cannot recommend one software product or service over another and is not responsible for any problems you have with software that you’ve bought.

Free software

HM Revenue and Customs (HMRC) has tested and recognised this free payroll software for businesses with fewer than 10 employees.

You should consider which features you need and make sure the software you choose has those features.

Supplier | Product(s)

1 2 Cloud Payroll | Free Cloud Payroll, Free Cloud Bureau Payroll

12Pay | Express

Accentra Technologies | Primo Payroll with Auto Enrolment (up to 10 employees)

Capium | Capium Payroll (up to 3 employees)

EnrolPay | Small Payroll

Hartigan Software Design | RTI Lite

HMRC | Basic PAYE Tools

IRIS Software | IRIS Payroll Basics

Kashflow | Kashflow Payroll

Shape Payroll | Shape Payroll (up to 3 employees)

Stansoft | Stansoft Linux

Paid-for software

The following suppliers produce payroll software that has been tested and recognised by HM Revenue and Customs (HMRC).

Supplier | Product(s) |

1 2 Cloud Payroll | Cloud Payroll with Mobile App |

12efile | RTI E-FILING Specialist, Professional P11D |

12Pay | 12Pay Payroll - Premium, Bureau, Enterprise |

Able Internet Payroll Ltd | Payroll Bureau, Payroll CIS Professional, Payroll Elite, Payroll Employees, Payroll IBM DB, Payroll Multi-Site, Payroll star DB, Payroll CIS Professional |

Accentra Technologies | Accentra Payroll (Desktop), Primo Payroll (Cloud), Solus Online Payroll |

Access Group | Access Payroll |

Accu-Man | Accu-Man Payroll, Accu-Man Daily Harvest Casuals |

Advanced | OpenPeople |

Advo Group | Advo Payroll |

Ajaccts Software | Ajaccts |

Algorithms Software | Xpedeon |

Allocate Software | 247 Time |

Altus Ltd | Altus Pension Reporting Gateway (APG) |

Andica | Andica Payroll, Andica P11D |

Automatic Data Processing | ADP freedom, ADP iHCM, ADP iHCM2 |

AW-Apps Ltd | AW-Apps Payroll |

Beauchamp Computer Services | Tripay |

BDO | P11D Enterprise |

Brain Payroll Ltd | Brain Payroll |

BrightPay | BrightPay |

Capita Employee Benefits | HartLink, PensionsOfficeII |

Capium | Capium P11D, Capium Payroll |

Cascade Human Resources | Iris Cascade Payroll, Iris Cascade Payroll web |

Catalyst Computer Systems Ltd | Platinum Software |

Ceridian Europe | Dayforce |

CGI HR Solutions | ePayfact |

Cintra HR and Payroll Services | Cintra IQ |

CIPHR | CIPHR Payroll |

Civica | Civica HR & Payroll |

Clear Books | Clear Books Payroll |

Commander Software Limited | Apollo Payroll |

Commercial Software Limited | CS P11D |

Compact Software Ltd | WinPay |

CoreHR | CoreHR XD |

Corporate Payroll Solutions Ltd | Legislator PayManager |

CPS HR & Payroll Solutions | Legislator HR |

Criterion | Criterion HCM – Payroll |

Crop-Ware | CropPayer |

Cyberaid | Cyberaid Internet Filing, TeamTrak Adaptiv |

DC Software | P11D Submission Pro |

eFile Ready Ltd | eFileReady |

EnrolPay | EnrolPay Payroll, EnrolPay AutoEnrolment |

Eque2 Ltd | MiraclePay for Dynamics NAV |

Equiniti | Perito |

Equiniti Paymaster | Compendia |

FastTrack Recruitment Software | FastTrack360 |

Fourth | Payroll |

FreeAgent | FreeAgent |

Frontier Software | Chris21 |

Gel Solutions Ltd | Gel All-in-One |

Greentree Software Ltd | Greentree ERP |

Hardhatadmin | Hardhatadmin |

Hartigan Software Design | RTI Lite, RTI Payroll for Pensions, RTI Payroll Standard, RTI Pro |

Hyko | Hyko Payroll |

IAW Resources | Ingenuity |

Infinet Cloud | UK Payroll For NetSuite |

Infor | Infinium |

Intelligo Software Ltd | Megapay |

Integrity Software Systems Ltd | Evolution M RTI |

IRIS | Payrite |

IRIS FMP | Amity, Teamspirit |

IRIS Payroll Professional | IRIS Payroll Professional |

IRIS Software | EARNIE, Farmplan EARNIE, Payroll Business, Bureau Payroll, GP Payroll, Exchequer Payroll, Earnie IQ, Earnie 32, PAYE-Master, PTP Tax Expense, IRIS P11D, IRIS Payroll Basics |

Jaama | Key2 Vehicle Management |

Jane Systems | Jane |

KashFlow | KashFlow Payroll |

KeyPay Ltd | KeyPay |

Keytime | Keytime Payroll, Keytime P11D |

KPMG | P11D Solutions 2020 |

K3 SYSPRO | Equator |

Liberty Accounts | Liberty Accounts Payroll with P11D |

LOKI Systems | Advanced Payroll |

Mamut | Mamut Payroll Start, Payroll Standard, Payroll Professional |

Merit Software | Merit Payroll |

m-hance | Infrastructure 365 |

MHR | iTrent |

Mintra Trainingportal AS | OCS Human Resource |

Mitrefinch Ltd | Mitrefinch Flexipay |

MoorepayHR | Moorepay Payroll |

Moneysoft | Payroll Manager |

My Digital Accounts | My Digital Accounts |

My PAYE Ltd | MyPAYE Online Payroll |

Nivid Biometrics Ltd | Taras Payroll |

Octopaye | Octopaye |

Omniphi Systems Limited | Omni PAYE Online |

Oracle Corporation UK Ltd | Oracle Cloud Fusion HCM |

Orovia Group Limited | EduPay |

Oxford Software | Tempaid 5 |

PAIYROLL | paiyroll |

Pay-Pro Ltd | Paystar |

Payback Payroll Software | Payback Payroll, Payback GP Payroll |

Paycircle Ltd | Paycircle |

PayFit | PayFit |

Payroll Business Solutions | Accord Payroll |

The Payroll Site | The Payroll Site |

Payroo | Payroo Star P11D, Payroo Bureau P11D, Payroo Payroll with CIS, P11D Professional |

Payescape Limited | PayRun.IO |

Pegasus Software | Pegasus Opera 3, Pegasus Opera 3 SQL, Pegasus Opera 3 SQL SE |

Personal Audit Systems Ltd | P11D Organiser |

PrimePRO | PrimePAY |

Promenics Ltd | Promenics HR & Payroll System |

Qtac | Payroll Assistant, Payroll Manager, Payroll Bureau, Payroll Specialist |

QuickBooks (Intuit) | QuickBooks Standard Payroll and QuickBooks Advanced Payroll |

RedSky IT | Summit |

RSM | InPay |

SAA Consultants | REIMS ARTIS, REIMS BARTIC, REIMS RTI Service |

Sage (UK) | Instant Payroll |

Sage (UK) | Sage 50cloud Payroll |

Sage (UK) | Sage 50 P11D, Sage 50 P11D Professional |

Sage (UK) | Sage Business Cloud Payroll |

Sage (UK) | SnowdropKCS |

SAP | SAP Payroll |

Sargent-Disc Ltd | Sargent-Disc Payroll |

SD Worx | SD Worx EIEx |

SDA Logic Limited | Pythagoras Payroll |

Shape Payroll | Shape Payroll, Shape Payroll API |

Sirius APP | SiriusPayroll365 |

Skynet Applied Systems | SkyPay |

Software for People | SfP World Service |

Sopra HR Software | HR Access version 9 |

Specialist Computer Services Ltd | Pyramid |

Staffology Payroll | Staffology Payroll |

Stansoft | Stansoft Linux |

Stirling Solutions | Stirling Payroll |

Sum-It Computer Systems | Total |

TalentPay | TalentPay |

Taxshield | P11D Manager |

Technology One | Technology One Human Resource & Payroll |

Teqhou | MiraclePay for AX2009, Mi-Pay for D365 |

TRG Advantage | Payroll, AutoEnrolment |

Unit4 | ERP |

WCBS | passFinance Payroll |

Workday UK Ltd | Workday Payroll for UK |

XCD | XCD HR & Payroll |

Xero | Xero Payroll, Xero Me mobile app |

Zeel Solutions | Zpayplus |

Zellis | ResourceLink |

If you change software

Some payroll software will not let you continue with the same employee Payroll IDs if you’ve already used them in other software.

If your payroll software does not let you do this, put ‘Yes’ in the ‘Payroll ID changed indicator’ for each employee in your Full Payment Submission (FPS).

Your PAYE bill may be calculated incorrectly, and payroll records duplicated, if you do not.


Fix problems with running payroll

Your PAYE bill is not what you expected

Every month you have to pay HM Revenue and Customs (HMRC) what you owe as part of running payroll for your employees.

There are things you should check if your PAYE bill is not what you expected when you view your online account.

What to check

Make sure you sent your Full Payment Submission  (FPS) or Employer Payment Summary (EPS) in time for the account to update.

You should also check that you:

used the date you paid your employees on your FPS report, not the date you sent it

reported other details in your FPS correctly, for example pay and deductions

reported your EPS correctly, for example to reclaim any statutory pay

previously paid HMRC the right amount - you may have paid too much or too little if your reports were incorrect

Employees starting and leaving

Check that you correctly reported any employees starting or leaving.

You may get an incorrect bill and duplicate payroll records if you made a mistake. Both  are usually corrected automatically - contact HMRC if your PAYE bill is still wrong by the 12th of the next tax month.

Correcting errors

If you find a mistake, follow the guidance to:

correct an error in your FPS or EPS

correct a payment to HMRC

You can also correct mistakes if you paid your employee the wrong amount or made incorrect deductions.

Get help to correct your PAYE bill

Contact HMRC’s employer helpline if you need help.

You made a mistake in your FPS or EPS

Your PAYE bill might be wrong if you made a mistake in your FPS or EPS. You might have to correct:

pay or deductions

payment dates

start or leaving dates for your employee

employee information

reports sent in advance

National Insurance category letters

amounts in your Employer Payment Summary (EPS)

the Apprenticeship Levy you owe (starting from April 2017) if you, or employers you’re connected to, have an annual pay bill of more than £3 million

You’ll only be charged a penalty for a mistake if you did not take reasonable care or did it deliberately.

If you’ve reported the wrong pay or deductions

To correct a mistake made in the current tax year, update the year-to-date figures in your next regular Full Payment Submission (FPS).

If you reported the wrong pay or deductions in the 2020 to 2021 tax year you can correct this by submitting another FPS with the correct year to date figures.

If you reported the wrong pay or deductions in the 2018 to 2019 or 2019 to 2020 tax years, you can correct this by submitting an Earlier Year Update (EYU) or a further FPS with the correct year to date figures.

For earlier tax years, send an EYU showing the difference between what you originally reported and the correct figure. You can only use an EYU for tax years when you were reporting online in real time.

If your payroll software cannot send an EYU, you can use HMRC’s Basic PAYE Tools.

The rules are different if you find a mistake in your final FPS of the year.

Correct a pension death benefit or flexibility payment

If you’re a pension administrator who needs to correct a flexibility payment or death benefit payment, you must:

select the ‘pension flexibility payment’ or ‘pension death benefit payment’ indicator

update the ‘pensions drawdown taxable payment’ or ’pensions drawdown non-taxable payment’ fields (or both) with the difference between what you originally reported and the correct figures

If your employee has stopped working for you

Include them in your next FPS and correct their year-to-date figures. Include their original ‘Date of leaving’ and put the same or a later ‘Payment date’ than the one shown on their final FPS.

Correct the payment date in your FPS

You should use the date you paid your employees in your FPS.

Send an additional FPS with the correct payment date if you’ve sent one with the wrong payment date. Write ‘H - correction to earlier submission’ in the ‘Late reporting reason’ field.

Send your corrected FPS by the 19th of the tax month after you sent your original FPS. HMRC will apply the correction to the right month.

If the wrong date was in different tax month, you must realign your payroll to the correct tax period.

Correct an employee’s start or leaving date

Update your payroll records with the correct date if you put the wrong start or leaving date for an employee in your FPS.

Do not report the amendment in your next FPS as this may create a duplicate record for the employee.

Correct your employee’s personal information

Correct your next FPS if you’ve made a mistake with your employee’s personal details.

Do not report updates to more than one of your employee’s personal details (for example their name, date of birth or gender) in the same FPS. Your payroll records may be duplicated if you do, and your PAYE bill might be wrong.

If your employee’s details (for example their address or surname) change:

they must tell HMRC straight away

you need to update your payroll records

Correct FPS reports sent in advance

If you’ve sent FPS reports in advance that need to be corrected (for example because an employee leaves), you should:

send another FPS for the tax month the correction relates to, making sure you fill in all relevant fields and revising the year-to-date figures if needed

correct any other FPS reports you sent in advance that are affected by the change

Correct an employee’s National Insurance category letter

How you do this depends on why the category letter changed, and in which tax year.

You’ve used the wrong category letter in the current tax year or the 2020 to 2021 tax year

Report the mistake in your next FPS.

Add the category letter you’ve used incorrectly.

Put ‘0’ in all National Insurance fields for this category letter except ‘Employee’s NICs this payment’, and enter the amount you have repaid or recovered here, for example put -£300 if you’re repaying an employee’s overpayment of £300.

Add the correct category letter, and enter the correct year-to-date National Insurance for this category letter.

Put ‘0’ in all National Insurance fields for the incorrect category letter for the rest of the tax year - you do not need to do this if the category should never have been used.

Some software allows you to correct this by adjusting net pay. You’ll still need to keep a record of the change.

Your employee’s category letter changed during the tax year

In your next FPS:

Continue to report year-to-date information for the old category.

Put ‘0’ in all ‘In this pay period’ fields for this category, and use the ‘Employee’s NICs this payment’ field to adjust any underpayment or overpayment of National Insurance.

If the mistake was in the 2019 to 2020 tax year or earlier

Send an EYU with:

negative amounts in all the National Insurance year-to-date fields in the incorrect category letter, to reduce the employee’s National Insurance to zero

the correct category letter and correct year-to-date National Insurance

If you’re correcting a mistake in the 2018 to 2019 or 2019 to 2020 tax years, you may be able to send an FPS instead - use your payroll software to check. Send it with the correct category letter and correct year-to-date National Insurance.

If the mistake caused an overpayment or underpayment

You must correct your employee’s National Insurance deductions if they paid too little or too much because they were on the wrong category letter.

Correct an EPS

To correct a mistake in the current tax year, send an EPS with the correct year-to-date figures.

For previous tax years, send an EPS with the correct year-to-date figures for the tax year where you made the mistake.

You paid HMRC the wrong amount

What you need to do to correct a payment depends on whether you paid too much or too little, and how the error occurred.

If you’ve paid HMRC too little

If you underpaid because of a mistake in your Full Payment Submission (FPS) or Employer Payment Summary (EPS), correct it in your next regular report. HM Revenue and Customs (HMRC) will add the underpayment to your next PAYE bill.

If you underpaid because you entered the wrong amount when paying HMRC, pay the balance as soon as possible or you may have to pay interest or a penalty. Use your Accounts Office reference when paying.

If you’ve paid HMRC too much

If you overpaid because of a mistake in your FPS or EPS, make the correction in your next regular report. HMRC will take the overpayment off your next PAYE bill.

If you overpaid because you entered the wrong amount when paying HMRC, or you made a duplicate payment, you can balance your account by paying less in your next PAYE bill.

You can also claim a refund if you’ve overpaid by contacting HMRC’s employer helpline.

HMRC will repay directly into your account if you’ve sent an EPS with your bank details.

Write to HMRC with your bank details if you cannot include them with your EPS.

Reclaim an overpayment for a previous tax year

You must work out why you overpaid before you can reclaim an overpayment for a previous tax year.

Work out why you overpaid

Compare what you’ve paid HMRC with what you’ve owed in your tax account. You may have overpaid if your payments did not take into account:

an overpayment carried over from a previous tax year

statutory pay for parents that you were entitled to reclaim

any repayments made to employees, for example because you used the wrong tax code

any corrections to your reports

student loan deductions

employees who left, for example because you did not report them correctly to HMRC

any incentive payments from HMRC to send reports online

any Construction Industry Scheme (CIS) deductions, or if you made deductions incorrectly

You also may have overpaid if you paid HMRC:

for the wrong tax year

more than once for the same bill

an estimated amount in advance

For duplicated or estimated payments, tell HMRC what you paid, what you should have paid and why you paid the additional amount.

Making your claim

Once you know why you’ve overpaid, you can claim your repayment from HMRC. You’ll need to tell them:

your business’s name and address

your PAYE reference - this is in your employer registration letter from HMRC

your contact telephone number

how much you’ve overpaid - for each tax year you’re claiming

the tax month you overpaid in (if possible)

why you overpaid - for each tax year you’re claiming

whether you’ve claimed this overpayment before

HMRC will offset the amount against your PAYE bill in the current tax year. If you do not owe anything, they will offset the amount:

against a PAYE bill from a previous tax year

against other taxes you owe, for example Corporation Tax

You’ll only get a refund if you do not owe HMRC any tax.

You must apply by letter if your company has been dissolved or struck off.

You paid your employee the wrong amount or made incorrect deductions

You can correct a mistake with an employee’s pay or deductions by updating the year-to-date figures in your next regular Full Payment Submission (FPS).

You can also correct it by sending an additional FPS before your next regular FPS is due. You need to:

update the ‘this pay period’ figures with the difference between what you originally reported and the correct figures

correct the year-to-date figures

put the same payment date as the original FPS

put the same pay frequency as the original FPS

put ‘H - Correction to earlier submission’ in the ‘Late reporting reason’ field

Correct a pension death benefit or flexibility payment

select the ‘pension flexibility payment’ or ‘pension death benefit payment’ indicator

If you underpaid your employee

Pay your employee the amount you underpaid them. On or before the day of this payment, send an additional FPS with:

the difference between what you originally reported and the correct amount in the ‘In this pay period’ field

updated year-to-date figures

‘H - Correction to earlier submission’ in the ‘Late reporting reason’ field

Correct an employee’s National Insurance deductions

What you need to do depends on when you made the mistake.

If the mistake was in this tax year

Repay or deduct the balance from your employee. Update the year-to-date figures to the corrected amount in your next regular FPS or send an additional FPS.

If you deducted too little, you cannot recover more than the employee’s National Insurance contribution due that month.

If the mistake was in the 2020 to 2021 tax year

Send an FPS with the amount you should have deducted.

You’ll need to write to HMRC if both the following apply:

the difference is negative because you deducted or reported too much National Insurance

you still owe your employee a refund, for example because they’ve left your employment

In the letter you’ll need to include:

the reference ‘Overpaid NI contributions’

your employee’s name, date of birth and National Insurance number

why you overpaid National Insurance contributions

which tax years you overpaid in

how much National Insurance you overpaid

why you are unable to make the payment to the employee

For a claim for one employee, send the letter to:

For a claim for more than one employee, send the letter to:

If the mistake was in the 2018 to 2019 or 2019 to 2020 tax years

Send an FPS with the correct year-to-date National Insurance if:

your payroll software will let you submit an FPS

you can pay any National Insurance refunds you owe

If you cannot use an FPS, send an Earlier Year Update (EYU) with the difference between:

the amount of National Insurance you originally deducted

the correct amount you should have deducted

If the difference is negative (because you deducted or reported too much National Insurance), you also need to set the ‘NIC refund indicator’ to:

‘Yes’ if you’ve refunded your employee or no refund was due

‘No’ if you still owe your employee a refund (for example because they’ve left your employment)

If the mistake was in the 2017 to 2018 tax year or earlier

Send an Earlier Year Update (EYU) with the difference between:

Yes’ if you’ve refunded your employee or no refund was due

If there’s an underpayment

If you deducted too little National Insurance, pay HMRC the underpayment straight away. You can then recover the amount from your employee by making deductions from their pay.

You cannot recover more than the amount of National Insurance the employee owes in a month (so the employee pays no more than double their normal contribution). Carry over the difference to later months - you can only make deductions in the tax year when you made the mistake and the year after.

Correct an employee’s student loan repayments

What you need to do depends on when you made the mistake.

If the mistake was in this tax year

If you deducted too little, you cannot recover more than the student loan repayment due that month.

If the mistake was in the 2020 to 2021 tax year

If you deducted too little, you do not need to do anything. Your employee should contact the Student Loans Company to find out how it affects them.

If you deducted too much, you need to repay your employee. Send an FPS with the correct ‘student loan repayment year to date’ figure as of 5 April for the previous tax year.

If the mistake was in the 2018 to 2019 or 2019 to 2020 tax year

If you deducted too much, you need to repay your employee.

Check your payroll software to see if you can submit an FPS. If you can, send it with the correct ‘student loan repayment year to date’ figure as of 5 April for the previous tax year.

Otherwise send an Earlier Year Update (EYU) with the difference between what you originally deducted and the correct amount.

If you deducted too much, you need to repay your employee. Send an Earlier Year Update (EYU) with the difference between what you originally deducted and the correct amount.


Make benefit debt deductions from an employee's pay

Overview

As an employer you may be asked to deduct benefit overpayments an employee owes the Department for Work and Pensions (DWP) from their pay. This is called a Direct Earnings Attachment (DEA).

DWP will write to you and ask you to operate the DEA scheme if any of your employees are affected. DEA only applies to a small proportion of people owing money to DWP.

You may also be asked to make deductions for Housing Benefit overpayments an employee owes their local authority. Contact local authorities, not DWP, about these deductions.

How it works

The Department for Work and Pensions (DWP) will write to you if you need to make Direct Earnings Attachment (DEA) deductions for an employee.

How deductions work

You’ll need to follow these steps if you get a letter from DWP saying you need to make Direct Earnings Attachment (DEA) deductions for an employee:

Tell your employee that money will be deducted from their pay.

Work out how much to deduct from your employee’s pay.

Check if your employee has other debt orders to pay and if they take priority over DEA.

Take the money from your employee’s pay.

Pay the money to DWP no later than the 19th day of the month following deduction in your payroll.

Continue to make employee deductions and payments to DWP until the debt has been repaid or DWP tells you to stop.

Read the employer’s guide for more information on DEA deductions and payments.

Record keeping

You must keep a record of deductions and tell DWP when an employee leaves your company.

You could be fined up to £1,000 if you do not make DEA deductions.

Help with DWP payments

Call the employer helpline if you have questions about how to run DEA or pay DWP.

This helpline is for DWP deductions only. Contact your employee’s local authority for Housing Benefit deductions.

Calculating DEA

To calculate the deductions from your employee’s pay you’ll have to:

work out the employee’s earnings after tax, class 1 National Insurance and workplace pension contributions

deduct the percentage shown in the table from the employee’s earnings

check if the employee has other debt orders and if they take priority over Direct Earnings Attachment (DEA) - see the employer’s guide

If the total of all deductions is more than 40% of the employee’s net earnings, DEA must be adjusted - see the employer’s guide.

If payments are made every 2 or 4 weeks, calculate weekly pay and deduct the percentage in the table.

Standard DEA rates

Deductions from earnings | Employee’s weekly pay | Employee’s monthly pay

Nothing to deduct | £100 or less | £430 or less

3% | £100.01 to £160 | £430.01 to £690

5% | £160.01 to £220 | £690.01 to £950

7% | £220.01 to £270 | £950.01 to £1,160

11% | £270.01 to £375 | £1,160.01 to £1,615

15% | £375.01 to £520 | £1,615.01 to £2,240

20% | More than £520 | More than £2,240

Higher DEA rates

In some circumstances you may be asked to deduct DEA at a higher rate. The Department for Work and Pensions (DWP) will tell you which rate to use when it contacts you to set up DEA deductions.

5% | £100 or less | £430 or less

6% | £100.01 to £160 | £430.01 to £690

10% | £160.01 to £220 | £690.01 to £950

14% | £220.01 to £270 | £950.01 to £1,160

22% | £270.01 to £375 | £1,160.01 to £1,615

30% | £375.01 to £520 | £1,615.01 to £2,240

40% | More than £520 | More than £2,240

Call the employer helpline if you’re unsure which rate to pay.

There is more detail about calculating DEA in the employer’s guide.

What counts as earnings

When calculating Direct Earnings Attachment (DEA) payments, you should include as earnings:

wages and salary

fees

bonuses

commission

overtime pay

occupational pensions if paid with wages or salary

compensation payments

Statutory Sick Pay

most other payments on top of wages

pay in lieu of notice

Do not count:

Statutory Maternity Pay

Statutory Adoption Pay

Ordinary or Additional Paternity Pay

guaranteed minimum pension

any money the employee gets from the government, such as benefits, pensions or credits (includes Northern Ireland or anywhere outside the UK)

statutory redundancy pay

expenses

pay or allowances as a member of HM Forces (does not include allowances for special members of the reserve force)


Make child maintenance deductions from an employee's pay

Overview

The Child Maintenance Service can ask you to:

give information about your employee so they can work out the right amount of child maintenance

set up a deduction from earnings order (DEO)

answer enquiries from other organisations who collect payments of child maintenance on their behalf

You may also be given an attachment of earnings order (AEO) by a court.

Your legal obligations when deducting child maintenance

By law, you must:

give information to the Child Maintenance Service if you’re asked to

send payments as soon as possible, to arrive no later than the 19th day of the month following the month you made the deduction

tell the Child Maintenance Service immediately if there are any problems with taking payments from a paying parent’s earnings

make regular payments - if you do not send payments and do not explain why, you could be taken to court

The paying parent is the parent who does not have main day-to-day care of the child.

You must report a change of circumstances to the Child Maintenance Service within 10 days. For example, if:

an employee leaves your business

you’re asked to set up a deduction from earnings order (DEO) for someone who does not work for you

You can report changes online or by phone.

Use the Child Maintenance Service online

If you’ve ever managed a case through the Child Maintenance Service, you can register for the online service. The service lets you:

see all deductions

report and make changes

send messages

see important information you’ve been sent

Call the Child Maintenance Service

You can call the Child Maintenance Service if you have questions or need to report a change.

Deduction from earnings orders (DEOs)

Deduction from earnings orders (DEOs) are a way of collecting child maintenance directly from a paying parent’s earnings or pension.

When you’ll get a DEO

You’ll be sent a deduction from earnings order (DEO) if one of your employees is a paying parent who:

chooses to pay child maintenance direct from their earnings

does not pay child maintenance owed

does not pay the correct amount

does not pay on time

What you need to do

You must deduct the amount of child maintenance stated on the DEO from your employee’s net earnings or their pension and pay it to the Child Maintenance Service. This will include any arrears that are due.

Other court orders against your employee

You could get a DEO from the Child Maintenance Service and an attachment of earnings order (AEO) from a court.

How to calculate deductions

The deduction from earnings order (DEO) will show 2 rates.

Rate | What it means

Normal deduction rate (NDR) | The amount your employee owes in child maintenance.  You’ll deduct this from their pay.

Protected earnings rate (PER) or protected earnings proportion (PEP) | The minimum pay you must make sure your employee takes home after all deductions have been made.

The PER applies to cases opened before 3 March 2003. The PEP applies to cases opened from 3 March 2003.

You must make sure that your deduction leaves your employee with the amount of their protected earnings, unless the deduction is for administrative costs.

How much to deduct

You may not always be able to deduct the full NDR from your employee’s pay.

This depends on how much they have left in net earnings once you’ve taken in account their PER or PEP.

You can deduct up to £1 for administration costs.

If you cannot deduct the full NDR

You must:

keep a record of the shortfall

carry forward the shortfall to the next period

send any deduction you’ve been able to make to the court or Child Maintenance Service

You then deduct the full amount of the shortfall plus the NDR owed for the next pay period. You must still leave your employee with the PER or PEP.

If the shortfall is carried forward for several weeks before being repaid, keep a record of the ongoing shortfall.

The Child Maintenance Service or court may need to review an NDR if an employee consistently cannot pay it.

If you pay your employee holiday pay in advance

You’ll have to:

calculate your employee’s total net earnings for the pay period

multiply the PER or PEP and the NDR by the number of weeks in the pay period

set aside the combined PER or PEP and take off the combined NDR in the usual way

If you get more than one DEO or AEO for an employee

Sometimes a paying parent has more than one case and is paying child maintenance for children by different receiving parents.

The receiving parent has main day-to-day care of the child. The paying parent does not have main day-to-day care.

You’ll have to pay AEOs in the order of the date of issue, so you might have to finish deducting payments for one before another.

AEOs for maintenance have to be paid before AEOs for civil debts.

What counts as earnings

A deduction from earnings order (DEO) or an attachment of earnings order (AEO) can only be made from the following earnings:

wages, fees, bonus, commission, overtime pay or any payments on top of wages

private or occupational pensions and compensation payments

Statutory Sick Pay

contractual sick pay

contractual maternity pay

contractual paternity pay

contractual adoption pay

contractual redundancy pay

Statutory pay is money that your employees are entitled to by law. Contractual pay is what you agree with your employees over and above statutory pay.

What does not count as earnings

Your employee cannot pay child maintenance by DEO or AEO if their only earnings are in the following categories:

amounts paid by a public department of the government of Northern Ireland or any country outside the UK

any social security pension, allowance or benefit

tax credits

any pension or allowance paid for disability

guaranteed minimum pension within the Social Security Pensions Act 1975

Statutory Maternity Pay

Statutory Paternity Pay

Statutory Adoption Pay

Statutory Redundancy Pay

Make DEO payments

You can be prosecuted if you do not pay the amount on a deduction from earnings order (DEO).

You can make DEO payments by using the Banks Automated Clearing System (BACS). The Child Maintenance Service can help you set it up.

Pay online

You can manage your Child Maintenance Service payments online.

You should send a single bulk BACS payment for all the employees you make a deduction from. You’ll get a monthly schedule.

Pay by other methods

You can also pay by:

internet banking

telephone banking

cheque (made payable to ‘The Child Maintenance Service’)

Account details to use

Sort code | Account number | Account name | Account code | Transaction code

60 70 80 | 10026584 | DWP CMG Employers | 0 | 99

You’ll need to give the employer reference number. It will be a 12 digit number starting with 5.

When to pay

You should send a payment to the Child Maintenance Service so it gets there no later than the 19th day of the month following the month that you took it.

You and your employee  will be sent a letter every year to remind you how much must be paid and when.

Deductions for administrative costs

You can take up to £1 towards administrative costs for each deduction, on top of the amount asked for on the DEO. You can take it even if it reduces your employee’s income below the protected earnings proportion or protected earnings rate.

Inform your employee

You must inform your employee in writing about each deduction when they are given their pay statement. Include the amount (if any) you deduct towards your expenses.

If pay statements are not usually given, you should inform your employee in writing. You should do this no later than the employee’s pay day after the deduction was made.

If you pay the wrong amount

Tell the Child Maintenance Service if you find a mistake in the amount you’ve paid. You can either:

use the Child Maintenance Service online

call the employer payment team

Change of circumstances for DEOs

Tell the Child Maintenance Service if your employee’s circumstances change.

You can either:

call the employer helpline

If your business stops trading, or if your employee leaves your employment, you must tell the Child Maintenance Service within 10 days.

You should also tell them if your employee changes their hours.

You and your employee will be sent a revised deduction from earnings order (DEO).

If the Child Maintenance Service cancels a DEO

They will write to you and your employee to tell you the DEO has been cancelled. They will ask you to stop taking deductions from the date of the letter.

You must only stop taking deductions if you’re told in writing.

If you do not help with DEOs or AEOs

You can be fined up to £250 or sent to prison for up to 14 days if you do not do what an attachment of earnings order (AEO) says you should do.

If you’ve got a deduction from earnings order (DEO) it’s an offence to:

not provide information when it’s required

make a false statement or representation

knowingly provide false information

delay or obstruct an inspector on purpose

refuse or fail to answer any questions or supply any information or to produce any document when it’s asked for

The Child Maintenance Service sometimes sends inspectors to interview ‘paying parents’ at work. You must let them interview your employee.

The ‘paying parent’ is the parent who does not have main day-to-day care of the child.

You can be fined up to £1,000 if you’re found guilty of any of these offences.


Make debt deductions from an employee's pay

When you have to deduct from pay

You have to make deductions from your employee’s wages if a court orders you to. This could be to pay off:

unpaid maintenance payments

a county court judgment

There’s a different process if you have to make deductions to pay off a benefit debt or child maintenance.

How it works

You’ll get a document from the court telling you to make deductions from your employee’s pay.

Work out how much you have to deduct each time your employee is paid.

Start making deductions the next time you pay your employee. Pay them their reduced wages on their normal payday.

Make the payment to the court.

Stop making deductions when the debt has been paid off.

You and your employee can be fined if you do not deduct their wages, or if you deliberately give false information about their earnings.

Getting an order

You and your employee will each get an ‘attachment of earnings order’ (AEO) from the court.

You must start making deductions from your employee’s pay from the next time you pay them, unless it’s within the next 7 days.

Write to the court within 10 days if you get an order for someone you do not employ.

What the order tells you

The court order will tell you:

how much your employee owes

if it’s a ‘priority order’ - if it does not say what it is, it’s a ‘non-priority order’

how much you have to take from their wages - called the ‘normal deduction rate’ (NDR)

the minimum amount they still have to take home - called the ‘protected earnings rate’ (PER)

how often the payments have to be made (weekly or monthly)

You can be fined if you do not start making the deductions.

Change how often the deductions are made

If a county court made the order, you can ask them to change it, for example from weekly to monthly if that’s how you pay your employee.

If a magistrate’s court made the order, your employee has to ask the court to change it.

Deductions and minimum take-home pay

You cannot make the normal deduction if it would take the employee below the protected earnings rate.

Protected earnings rate is too high

If the protected earnings rate is so high that you’ll never be able to make deductions, write to both:

the court who issued the order

Include the:

court case number

attachment of earnings order number

name of the employee

Priority and non-priority orders

There are 2 types of orders - priority orders and non-priority orders. The way you calculate deductions for them is different.

Type of order | What it’s used for | If you cannot make the full deduction

Priority | Maintenance or fines | Carry the unpaid difference over to the next payday

Non-priority | Civil debts | Do not carry the unpaid difference over to the next payday

If your employee has more than one order

Deduct any priority orders first, in the order the employee got them. Then deduct the non-priority orders in the order the employee got them.

You can apply to the court to combine 2 or more non-priority orders into a single order. This is called a ‘consolidated attachment of earnings order’.

Deductions for a priority order

Priority orders are used for unpaid maintenance or fines.

Calculate your employee’s earnings.

Take off the normal deduction rate from their earnings.

Take off an extra £1 towards your administrative costs (if you want to).

Pay your employee the remainder of their earnings. You must pay them at least their protected earnings rate (this is given in the order). If you cannot deduct the full amount, carry the difference over and deduct it on the next payday.

Send the deduction to the court.

You can still deduct the £1 if it takes your employee’s income below their protected earnings rate - but not if it takes their income below the National Minimum Wage.

Making a full deduction

Deduct the full amount from your employee’s earnings if it does not take them below their protected earnings rates.

When you cannot make a full deduction

If the full deduction would take the employee below their protected earnings rate, carry the difference over to their next payday.

When you cannot make any deduction

There’s a different process if you cannot make any deduction because the employee’s earnings are below their protected earnings rate.

You have to tell the Centralised Attachment of Earning Payments (CAPS) office you could not make a deduction. Send an email to caps@justice.gov.uk with the:

court case number

attachment of earnings order number

name of the employee

reason you could not make any deduction

Paying your employee for a different pay period

Recalculate the protected earnings rate and normal deduction rate if you pay your employee for a different period than usual.

Holiday pay in advance

Use the same process if you’re paying your employee holiday pay in advance.

You’ll need to work out the different rates for:

the month when you give pay in advance

the following month when you pay them less than normal

Deductions for a non-priority order

Non-priority orders are used for debts from a county court judgment (CCJ).

Calculate your employee’s earnings.

Pay your employee the remainder of their earnings. You must pay them at least their protected earnings rate.

Send the deduction to the court.

Making a full deduction

When you cannot make a full deduction

Do not carry any unpaid difference over to the next payday if the full deduction would take the employee below their protected earnings rate.

When you cannot make any deduction

Do not carry the deduction over to the next payday if the employee’s earnings are below their protected earnings rate.

court case number

attachment of earnings order number

name of the employee

reason you could not make any deduction

Holiday pay in advance

the month when you give pay in advance

the following month when you’d pay them less than normal

What counts as earnings

You can only make a deduction from the following earnings:

wages, fees, bonuses, commissions, overtime pay or any payments on top of wages

private or occupational pensions and compensation payments

Statutory Sick Pay

contractual sick pay

contractual maternity pay

contractual paternity pay

contractual adoption pay

contractual redundancy pay

Statutory pay is money that your employees are entitled to by law. Contractual pay is what you agree with your employees in addition to statutory pay.

What does not count as earnings

You cannot make a deduction from any of the following:

amounts paid by a department of the government of Northern Ireland or any country outside the UK

any social security pension, allowance or benefit

tax credits

any pension or allowance paid for disability

guaranteed minimum pension within the Social Security Pensions Act 1975

Statutory Maternity Pay

Statutory Paternity Pay

Statutory Adoption Pay

Statutory Redundancy Pay

Making payments

The order that you get for the employee will tell you whether you have to pay:

the magistrates’ court

the Centralised Attachment of Earnings Payments (CAPS) office

Tell your employee each time

You must tell your employee in writing about each deduction. Do this when you give them their payslip.

Paying the magistrates’ court

Send a cheque made payable to ‘HM Courts & Tribunals Service’.

You can pay with a single cheque if you’re paying 2 or more orders issued by the same court.

Some courts let you pay by Bacs transfer. Contact the court for their account details if you want to pay this way.

When you send the payment, you must include a note of:

the employer name

the employee’s name

the case number from the order

how much money you’re sending

Paying the CAPS office

You can only pay by:

cheque

Bacs transfer

You cannot pay by standing order or Direct Debit.

Pay CAPS by cheque

Send a cheque made payable to ‘HM Courts & Tribunals Service’ to CAPS.

Pay CAPS by Bacs

You must register before you can pay by Bacs. Download and fill in the registration form and email it to ntonbacs@justice.gov.uk.

To make a Bacs payment, send:

a bank payment request form to your bank

the Bacs payment schedule form to ntonbacs@justice.gov.uk

The payment will be sent back if you do not fill in the schedule correctly. You can be fined if you do not send the schedule.

Contact CAPS about a payment

You need to give these details when you contact CAPS about a payment:

case number

your name (as stated on your bank statement)

your bank account number

your sort code

amount of payment

Change of circumstances

Write to the Centralised Attachment of Earning Payments (CAPS) office within 10 days if the employee stops working for you.

Include the:

court case number

attachment of earnings order number

name of the employee

date they stopped working for you

name of their new employer (if you know it)

The court changes the order

The County Court Money Claims Centre will tell you in writing if the normal deduction rate or protected earnings rate changes. They can change it for 4 weeks.

When the 4 weeks is over, you have to go back to the original rates in the order.

The court cancels the order

The County Court Money Claims Centre will tell you in writing if the order has been ‘discharged’ (cancelled).

You can still make the deduction if you’re due to pay your employee within the next 7 days. Your employee will get a refund from CAPS.

You must stop making deductions if you’re due to pay your employee 7 days after you got the cancellation notice.


Minimum wage for different types of work

Overview

The National Minimum Wage is worked out at an hourly rate, but it applies to all eligible workers even if they’re not paid by the hour.

This means that, however someone gets paid, they still need to work out their equivalent hourly rate to see if they’re getting the minimum wage.

There are different ways of checking that workers get the minimum wage depending on whether they are:

paid by the hour (known as ‘time work’)

paid an annual salary, under a contract for a basic number of hours each year (known as ‘salaried hours’)

paid by the piece - the number of things they make, or tasks they complete (known as ‘output work’)

paid in other ways (known as ‘unmeasured work’)

Use the National Minimum Wage calculator to check if payments are over the minimum wage.

What counts as working time

For all types of work, include time spent:

at work and required to be working, or on standby near the workplace (but do not include rest breaks that are taken)

not working because of machine breakdown, but kept at the workplace

waiting to collect goods, meet someone for work or start a job

travelling in connection with work, including travelling from one work assignment to another

training or travelling to training

at work and under certain work-related responsibilities even when workers are allowed to sleep (whether or not a place to sleep is provided)

Do not include time spent:

travelling between home and work

away from work on rest breaks, holidays, sick leave or maternity leave

on industrial action

not working but at the workplace or available for work at or near the workplace  during a time when workers are allowed to sleep (and you provide a place to sleep)

Call the Acas helpline for advice about the National Minimum Wage.

Paid by the hour

Workers paid according to the number of hours they are at work are classed as doing ‘time work’.

For these workers, the average hourly pay has to be at least the National Minimum Wage, worked out over the period each pay packet covers - so for a worker who gets paid once a month, this period will be 1 month.

Use the National Minimum Wage calculator to check if payments are at least at the minimum wage.

Paid an annual salary

Most people paid an annual salary are classed as doing ‘salaried hours work’.

To find out if they are getting the minimum wage you must work out how many basic hours they work in return for their salary.

Someone is usually doing salaried hours work if all of the following apply:

their contract states how many hours they must work in return for their salary (their basic hours)

they’re paid in equal, regular instalments through the year, for example monthly or every 4 weeks

there is no more than a month between each payment

they do not get paid more than once a week

If someone is paid monthly they do not need to be paid exactly the same amount each month, but they must get the same total amount every 3 months (each quarter of the year).

Salaried hours workers’ contracts might not state the total number of basic hours the worker must work over the entire year, but you must be able to work this out from the contract.

For example, if a contract states the days of the week someone is expected to work and the basic hours for each day, you can use this to work out the total basic hours someone is expected to work over the year.

You can then use this figure to make sure the rate of pay is at least the minimum wage.

Work out the hourly rate

Find the basic annual hours in the worker’s contract.

Divide this by the number of times they get paid each year (for example 12 if they get paid monthly) - this gives you the average number of hours covered by each pay packet.

Divide the amount they get in each pay packet by this number (average hours). This gives you the worker’s hourly rate.

If you know how many basic hours someone works for each payment they get, you can use the National Minimum Wage calculator to check if they’re paid the minimum wage.

Extra hours

Employers must pay at least the minimum wage for any hours worked in addition to what’s agreed in the worker’s contract.

Other salaried workers

Some people paid a salary may not be salaried hours workers, for example if there is more than a month between each payment.

These people are usually classed as doing ‘time work’ when working out if they are paid minimum wage or not.

Paid per task or piece of work done

Workers paid per task they perform or piece of work they do (known as piece work) are classed as doing ‘output work’.

They must be paid either:

at least the minimum wage for every hour worked

a ‘fair rate’ for each task or piece of work they do

Output work can usually only be used in limited situations when the employer does not know which hours the worker does (such as with some home workers).

The work is not classed as output work if the employer sets either:

a minimum or maximum time the worker must work

the start and finish times for a period of work

If the employer sets the times of work this counts as ‘time work’.

Fair rate

The fair rate is the amount that must be paid for each piece of work, to make sure someone working at an average speed is paid at least the minimum wage per hour.

There is a way to work out the fair rate per piece of work done which employers must follow.

Work out the average rate of work per hour

Employers must carry out a fair test to find out how many tasks or pieces an average worker completes in an hour (the average rate of work).

Test some or all of the workers. The group you test must be typical of the whole workforce - not just the most efficient or fastest ones.

Work out how many pieces of work have been completed in a normal working hour.

Divide this by the number of workers to work out the average rate.

If the work changes significantly, do another test to work out the new average rate. It’s not necessary to do another test if the same work is being done in a different environment, for example work previously done in a factory being done at home.

Work out the fair rate

Divide the average rate of work by 1.2 (this means new workers will not be disadvantaged if they’re not as fast as the others yet).

Divide the hourly minimum wage rate by that number to work out the fair rate for each piece of work completed.

If an agricultural worker was employed before 2013 or is in Wales, they may be entitled to the Agricultural Minimum Wage. There are also different rules and rates for agricultural workers in Scotland and Northern Ireland.

Give notice of fair rate

To use a fair rate an employer must give each worker a written notice before they start work for the first time.

The notice must:

say that the worker will be paid for producing a piece of work or completing a task, for example picking a certain amount of fruit

say that to calculate whether minimum wage is being paid it’s assumed the task will take an average time to complete

confirm if the average time to complete the task has been tested or is an estimate

say how many tasks or pieces of work it’s assumed someone can complete in an hour

give the amount to be paid for each piece that the worker completes

include the ACAS helpline number, which is 0300 123 1100

If employers do not give a worker a complete notice then the worker is entitled to be paid by the hour instead.

Paid in other ways (unmeasured work)

If the work is not covered by any of the other types of work, it’s ‘unmeasured work’.

Unmeasured work includes being paid a set amount to do a particular task, for instance being paid £500 to lay a patio, regardless of how long it takes.

To work out the minimum wage for unmeasured work, either:

record every hour worked and use the National Minimum Wage calculator to make sure the worker gets the minimum wage

make a ‘daily average agreement of hours’

Daily average agreement of hours

This is when the employer and worker agree a typical number of hours per day they expect to work on average. One agreement can cover several pay reference periods (for example, weeks if the worker’s paid weekly) if there’s no change in the average number of hours.

Daily average agreements of hours must:

be agreed in writing

be made before the start of the pay reference period they cover

say how many hours the work should take each day (on average)

The employer must be able to prove that the number of hours worked on average is realistic.


National Minimum Wage and Living Wage: accommodation

Accommodation rates

Accommodation provided by an employer can be taken into account when calculating the National Minimum Wage or National Living Wage.

No other kind of company benefit (such as food, a car, childcare vouchers) counts towards the minimum wage.

Accommodation offset rates

The accommodation rates are set in April each year.

Year | Daily accommodation offset rate | Weekly accommodation offset rate

April 2021 (current rate) | £8.36 | £58.52

Previous rates

2020 | £8.20 | £57.40

2019 | £7.55 | £52.85

2018 | £7 | £49

2017 | £6.40 | £44.80

2016 (October) | £6 | £42

2015 | £5.35 | £37.45

2014 | £5.08 | £35.56

Use the minimum wage calculator to check if it’s been paid.

Using the offset rate to work out the minimum wage

If an employer charges more than the offset rate, the difference is taken off the worker’s pay which counts for the National Minimum Wage or National Living Wage.

This means the higher the accommodation charge, the lower a worker’s pay when calculating the minimum wage.

If the accommodation charge is at or below the offset rate, it does not have an effect on the worker’s pay.

If the accommodation is free, the offset rate is added to the worker’s pay.

See examples of accommodation rates for minimum wage calculations.

What counts as accommodation charges

Include these costs as part of your overall accommodation charges:

rent

charges for things like gas, electricity, furniture

laundry

Working out if the employer provides the accommodation

The employer is providing accommodation if any of these apply:

the accommodation comes with the job

the employer (or a connected person or company) owns or rents the property the worker lives in, even if there’s no direct link between the job and the accommodation

the employer (or an owner, business partner, shareholder or director) gets a payment or benefit from the worker’s landlord or a member of the landlord’s family

Accommodation costs count towards the National Minimum Wage or National Living Wage, even if the worker does not have to use the accommodation to do the job. If the accommodation is optional, it only counts as a cost if the worker uses it.

Local housing authority and social housing providers

If someone working for a local housing authority or social housing provider gets accommodation from their work, this does not automatically count towards the National Minimum Wage or National Living Wage.

It only counts if the accommodation is linked to the employment. For example, a care warden who has to live on site has their accommodation linked to their job.

Higher or further education institutions

Accommodation is not counted when working out the National Minimum Wage or National Living Wage if it’s provided by a higher or further education institution to a worker who’s enrolled on a full-time course with the institution.

Help and advice

Call the Acas helpline if you have any questions about workers’ rights and the minimum wage.

Effect on the minimum wage

This effect of accommodation rates on the National Minimum Wage or National Living Wage depends on how much an employer charges for accommodation.

It’s calculated by ‘pay period’, the intervals at which someone is being paid. This can be weekly, monthly or in irregular intervals like every 10 days.

If the accommodation is free, it still affects the minimum wage. There is an offset rate of £8.36 per day for this.

It does not matter if the cost of the accommodation is taken from the worker’s wages beforehand or if the worker pays the cost after they get their wages.

Examples


PAYE Online for employers

Using PAYE Online

As an employer, you need to use HM Revenue and Customs’ (HMRC) PAYE Online service to:

check what you owe HMRC

pay your bill

see your payment history

access tax codes and notices about your employees

appeal a penalty

get alerts from HMRC when you report or pay late, or do not send the expected number of reports in a month

send expenses and benefits returns such as P46 (car), P11D and P11D(b)

Online services may be slow during busy times. Check if there are any problems with this service.

Sign in

This guide is also available in Welsh (Cymraeg).

Before you start

Most new employers get a login when they register as an employer online. If you do not have a login because you registered in a different way you’ll need to enrol for PAYE Online separately.

Tax codes and notices

HMRC sends you information about your employees through PAYE Online. You can log in to view:

tax code notices (P6 and P9)

student loan notices (SL1 and SL2)

National Insurance verification notices (NVR and NOT)

late reporting and late payment alerts (HMRC call these ‘generic notifications’)

You can also access these through some payroll software, or by using the PAYE Desktop Viewer.

Enrol if you did not register online

You only need to enrol separately for HM Revenue and Customs’ (HMRC) PAYE Online service if you did not get a login when you registered as an employer - this is usually because you did not register online.

You’ll need your PAYE reference and Accounts Office reference - these are included in the letter from HMRC confirming your registration.

Enrol for PAYE Online

How you enrol depends on whether you already have an online account for other taxes, for example Corporation Tax or Self Assessment.

You already have an account

Sign in to your account and select ‘PAYE for employers’ from the list.

You do not have an account

Enrol as a new business account holder and select ‘Add a tax to your account’ on the ‘Business tax summary’ page. You will then be able to add PAYE for employers.

PAYE Desktop Viewer

PAYE Desktop Viewer is an application from HM Revenue and Customs (HMRC) that allows you to view, search and sort large numbers of employee tax codes and notices.

You can also use it to download notices and view them offline instead of accessing them through HMRC’s PAYE Online service, or your payroll software if it includes this feature.

Download PAYE Desktop Viewer


PAYE and payroll for employers

Introduction to PAYE

As an employer, you normally have to operate PAYE as part of your payroll. PAYE is HM Revenue and Customs’ (HMRC) system to collect Income Tax and National Insurance from employment.

You do not need to register for PAYE if none of your employees are paid £120 or more a week, get expenses and benefits, have another job or get a pension. However, you must keep payroll records.

Payments and deductions

When paying your employees through payroll you also need to make deductions for PAYE.

Payments to your employees

Payments to your employees include their salary or wages, as well as things like any tips or bonuses, or statutory sick or maternity pay.

Deductions from their pay

From these payments, you’ll need to deduct tax and National Insurance for most employees. Other deductions you may need to make include student loan repayments or pension contributions.

Reporting to and paying HMRC

Reporting pay and deductions

If you run payroll yourself, you’ll need to report your employees’ payments and deductions to HMRC on or before each payday.

Your payroll software will work out how much tax and National Insurance you owe, including an employer’s National Insurance contribution on each employee’s earnings above £170 a week.

You’ll need to send another report to claim any reduction on what you owe HMRC, for example for statutory pay.

Paying HMRC

You’ll be able to view what you owe HMRC, based on your reports. You then have to pay HMRC, usually every month.

If you’re a small employer that expects to pay less than £1,500 a month, you can arrange to pay quarterly - contact HMRC’s payment enquiry helpline.

Other things to report

As part of your regular reports, you should tell HMRC when a new employee joins and if an employee’s circumstances change, for example they reach State Pension age or become a director.

You have to run annual reports at the end of the tax year - including telling HMRC about any expenses or benefits.

Choose how to run payroll

If you have to operate PAYE, you can choose how to run your payroll.

Choose how to run payroll

You can operate PAYE by either:

paying a payroll provider to do it for you

doing it yourself using payroll software

Paying a payroll provider

If you decide to pay a payroll provider (for example, a bureau or accountant) to run your payroll, you’ll need to consider how much support you’ll need.

You’re responsible for collecting and keeping records of your employee’s details. Your payroll provider will need these to run payroll for you.

Some payroll providers can offer you more support if you need it, for example keeping employee records, providing payslips and making payments to HM Revenue and Customs (HMRC).

As an employer, you’re legally responsible for completing all PAYE tasks - even if you pay someone else to do them.

Running payroll yourself

You need to complete certain tasks to set up payroll and pay your employees for the first time. This includes registering as an employer with HMRC and telling them about your employees.

Exemptions to online reporting

You may be exempt from reporting payroll online if:

you’re prevented from using a computer on religious grounds

you’re getting care or support services for yourself or a member of your family

you’re unable to send reports electronically because you’re disabled, elderly or cannot access the internet

HMRC has guidance if you believe you’re exempt and would prefer to report on paper.

Setting up payroll

If you decide to run payroll yourself, you need to complete certain tasks to pay your employees for the first time. You can choose when and how often to pay your employees.

Register as an employer with HM Revenue and Customs (HMRC) and get a login for PAYE Online.

Choose payroll software to record employee’s details, calculate pay and deductions, and report to HMRC.

Collect and keep records.

Tell HMRC about your employees.

Record pay, make deductions and report to HMRC on or before the first payday.

Pay HMRC the tax and National Insurance you owe.

You’ll also need to complete certain annual reports and tasks to prepare for the next tax year, which starts on 6 April.

Keeping records

You must collect and keep records of:

what you pay your employees and the deductions you make

reports you make to HM Revenue and Customs (HMRC)

payments you make to HMRC

employee leave and sickness absences

tax code notices

taxable expenses or benefits

Payroll Giving Scheme documents, including the agency contract and employee authorisation forms

Your records must show you’ve reported accurately, and you need to keep them for 3 years from the end of the tax year they relate to. HMRC may check your records to make sure you’re paying the right amount of tax.

There are different rules for keeping records to prove you have paid the correct minimum wage.

If you do not keep full records, HMRC may estimate what you have to pay and charge you a penalty of up to £3,000.

If your records are lost, stolen or destroyed

Tell HMRC as soon as possible if you do not have records and cannot replace them. You must also do your best to recreate them - HMRC may be able to help if you’re not sure how much you paid your employees.

You must tell HMRC if your final payroll report of the tax year includes figures that are:

estimated - that you want HMRC to accept as final

provisional - that you’ll update later with actual figures

Data protection

You must follow rules on data protection if your business stores or uses personal information.


Pay a PAYE Settlement Agreement

Overview

You must pay the tax and Class 1B National Insurance due from your PAYE Settlement Agreement (PSA) by 22 October following the tax year it applies to.

This guide is also available in Welsh (Cymraeg)

Pay online

Make sure you pay HM Revenue and Customs (HMRC) by the deadline. You may have to pay penalties and interest if your payment is late.

Pay now

Other ways to pay

You can choose to pay in other ways. The time you need to allow depends on how you pay.

You can no longer pay at the Post Office.

Up to 2 days

online or telephone banking (Faster Payments)

CHAPS

by debit or corporate credit card online

at your bank or building society

3 working days or more

Bacs

Direct Debit (if you’ve set up one for HMRC before)

by cheque through the post

5 working days

Direct Debit - if you have not set up one for HMRC before

If the deadline falls on a weekend or bank holiday, make sure your payment reaches HMRC on the last working day before it (unless you’re paying by Faster Payments).

Bank details for online or telephone banking, CHAPS, Bacs

You can pay by Faster Payments, CHAPS or Bacs to HM Revenue and Customs’ (HMRC) account.

Sort code | Account number | Account name

08 32 10 | 12001020 | HMRC Shipley

Reference number

You’ll need to use your PAYE Settlement Agreement (PSA) reference number as the payment reference.

It starts with an X and is on the payslip HMRC sent you. If you do not have your PSA number, contact the office that’s dealing with your application.

Do not use your PAYE Accounts Office reference number. Your payment may be delayed if you use the wrong reference.

How long it takes

Payments made by Faster Payments (online or telephone banking) will usually reach HMRC on the same or next day, including weekends and bank holidays.

CHAPS payments usually reach HMRC the same working day if you pay within your bank’s processing times.

Bacs payments usually take 3 working days.

Check your bank’s transaction limits and processing times before making a payment.

Overseas payments

Use these details to pay from an overseas account.

Account number (IBAN) | Bank identifier code (BIC) | Account name

GB03BARC20114783977692 | BARCGB22 | HMRC Shipley

HMRC’s banking address is:

By debit or corporate credit card online

You can pay online.

There’s a fee if you pay by corporate credit card or corporate debit card. The fee is not refundable.

There’s no fee if you pay by personal debit card.

You cannot pay by personal credit card.

You’ll need your PAYE Settlement Agreement (PSA) reference number. It starts with an X and is on the payslip HM Revenue and Customs (HMRC) sent you.

If you do not have your PSA number, contact the HMRC office that’s dealing with your application.

HMRC will accept your payment on the date you make it (even on bank holidays and weekends) - not the date it reaches HMRC’s account.

If you’re unable to pay your PSA in full by card, you should use another payment method like a bank transfer.

At your bank or building society

You can pay at your branch by cash or cheque. You’ll need to use the PAYE Settlement Agreement (PSA) payslip sent to you by HM Revenue and Customs (HMRC).

Make your cheque payable to ‘HM Revenue and Customs only’.

Write your PSA reference number on the back of your cheque. The number starts with an X. You will find it on the payslip.

HMRC will accept your payment on the date you make it (if you pay it from Monday to Friday) and not the date it reaches HMRC’s account.

Direct Debit

Set up a Direct Debit through your business’s HM Revenue and Customs (HMRC) online account to make a single payment. This means you’ll need to set up a payment each time you pay HMRC through Direct Debit.

Use your reference number

You’ll need your PAYE Settlement Agreement (PSA) reference number. It starts with an X and is on the payslip HMRC sent you.

How long it takes

Allow 5 working days to process a Direct Debit the first time you set one up. It should take 3 working days next time if you’re using the same bank details.

If you pay PAYE or Class 1 National Insurance contributions by Direct Debit, make a separate Direct Debit payment for your PSA.

By cheque through the post

You can send a cheque by post to HM Revenue and Customs (HMRC).

You do not need to include a street name, city name or PO box with this address.

Allow 3 working days for your payment to reach HMRC.

What to include

Write your PAYE Settlement Agreement (PSA) reference number on the back of the cheque. It starts with an ‘X’ and you’ll find it on your payslip.

Include the payslip HMRC sent you. Do not fold the payslip or cheque or fasten them together.

Your payment may be delayed if you do not fill in your cheque properly.

If you want a receipt, include a note asking for one.

If you do not have a payslip

You can print a payslip to use to pay by post. You cannot use this at a bank.

Check your payment has been received

You can check your bank or building society statement to confirm the payment has left your account.

If you’re paying by post, you can include a letter with your payment to request a receipt from HM Revenue and Customs (HMRC).


Pay a PAYE late payment or filing penalty

Overview

You have 30 days from the date on the PAYE late penalty notice to pay or appeal it.

Pay now

Ways to pay

Make sure you pay HM Revenue and Customs (HMRC) by the deadline.

The time you need to allow depends on how you pay.

You can no longer pay at the Post Office.

Same or next day

online or telephone banking (Faster Payments)

CHAPS

by debit or corporate credit card online

at your bank or building society

3 working days

Bacs

Direct Debit (if you’ve set up one for HMRC before)

by cheque through the post

5 working days

Direct Debit (if you have not set up one for HMRC before)

If the deadline falls on a weekend or bank holiday, make sure your payment reaches HMRC on the last working day before it (unless you’re paying by Faster Payments).

Bank details for online or telephone banking, CHAPS, Bacs

You can pay by Faster Payments, CHAPS or Bacs to HM Revenue and Customs’ (HMRC) account.

Sort code | Account number | Account name

08 32 10 | 12001020 | HMRC Shipley

Reference number

You’ll need to use your penalty reference number as the payment reference. This starts with an X and you’ll find it on the penalty notice HMRC sent you.

Do not use your PAYE Accounts Office reference number. Your payment may be delayed if you use the wrong reference.

How long it takes

Payments made by Faster Payments (online or telephone banking) will usually reach HMRC on the same or next day, including weekends and bank holidays.

CHAPS payments usually reach HMRC the same working day if you pay within your bank’s processing times.

Bacs payments usually take 3 working days.

Check your bank’s transaction limits and processing times before making a payment.

Overseas payments

Use these details to pay from an overseas account.

Account number (IBAN) | Bank identifier code (BIC) | Account name

GB03BARC20114783977692 | BARCGB22 | HMRC Shipley

HMRC’s banking address is:

By debit or corporate credit card online

You can pay online.

There’s a fee if you pay by corporate credit card or corporate debit card. The fee is not refundable.

There’s no fee if you pay by personal debit card.

You cannot pay by personal credit card.

You’ll need to use your penalty reference number as the payment reference. This starts with an X and you’ll find it on the penalty notice HM Revenue and Customs (HMRC) sent you.

HMRC will accept your payment on the date you make it (even on bank holidays and weekends) - not the date it reaches HMRC’s account.

If you’re unable to pay your penalty in full by card, you should use another payment method like a bank transfer.

At your bank or building society

You can pay at a branch by cash or cheque. You’ll need to use the HM Revenue and Customs (HMRC) payslip included with the late penalty or filing notice.

Make your cheque payable to ‘HM Revenue and Customs only’.

Write your penalty reference number on the back of your cheque. The reference number starts with an X. You will find it on the penalty notice sent to you by HMRC.

HMRC will accept your payment on the date you make it (if you pay it from Monday to Friday) and not the date it reaches HMRC’s account.

Direct Debit

Set up a Direct Debit through your business’s HM Revenue and Customs (HMRC) online account to make a single payment.

Allow 5 working days to process a Direct Debit the first time you set one up. It should take 3 working days next time if you’re using the same bank details.

By cheque through the post

You can send a cheque by post to HM Revenue and Customs (HMRC).

You do not need to include a street name, city name or PO box with this address.

Allow 3 working days for your payment to reach HMRC.

What to include

Write your penalty reference number on the back of the cheque. It starts with an ‘X’ and you’ll find it on the penalty notice HMRC sent you.

Include the payslip from the penalty notice. Do not fold the payslip or cheque or fasten them together.

Your payment may be delayed if you do not fill in your cheque properly.

If you want a receipt, include a note asking for one.

If you do not have a payslip

You can print a payslip to use to pay by post. You cannot use this at a bank.

Check your payment has been received

View your HMRC online account to see if your payment has been received - it should update within 6 working days.

You can also check your bank or building society statement to confirm the payment has left your account.

If you’re paying by post, you can include a letter with your payment to request a receipt from HMRC.