The P11D deadline has passed, however, the deadline to pay the Class 1A National Insurance Contributions (NICs) looms closer for the 2017/18 tax year.

Class 1A NICs are due for payment by:

  • Thursday 19 July 2018 or
  • As cleared funds in HM Revenue and Customs’ (HMRC) account by Sunday 22 July 2018 if making the payment electronically

There are two important factors:

There is a 17-character reference number that should be sourced and may be needed to accompany the payment.  This reference is a mutation of the usual Accounts Office reference number used.

It is made up from the first 13 characters of the Accounts Office reference number and a 4-character tax year identifier suffix.  This identifies to HMRC the PAYE reference and the tax year to which the payment relates.  The 4-character suffix is as follows:

  • 2 characters that indicate the calendar year in which the tax year finished, i.e. 18 for 2017/18 tax year
  • The characters 13 indicating that this is not a ‘normal’ payment of PAYE liabilities relevant to a particular tax month or quarter

As an example, if the 13-character PAYE reference is 123 PA 00012345 the Class 1A payment reference number will be 123 PA 00012345 1813.

It is essential that the correct Accounts Office reference number is used when accompanying the payment.  Using just the usual 13-characters may result in HMRC’s system misallocating the payment with the consequence of late payment and interest charges.

There are two valid ways of making the payment to HMRC:

  1. Electronically and
  2. Post

The 17-character reference is not required in all situations and employers should look at HMRC’s guidance on Gov.UK which I summarise as follows:

Faster Payments

Employers can pay using the following details:

The 17-character reference is required and payment by this method is usually received on the same or next day.

CHAPS or BACS

Employers can pay by CHAPS or BACS using the following details:

The 17-character reference is required.  CHAPS payments are usually the same working day if they are made within the initiating bank’s processing schedule.  BACS payments usually take 3 working days to credit HMRC‘s account.

Overseas Account

Employers can pay using the following details:

HMRC’s banking address is:

Barclays Bank PLC, 1 Churchill Place, London, United Kingdom, E14 5HP

There is no guidance on whether the 17-character reference is required (but I would add it if you can).  Please check how long this payment will take to reach HMRC’s account, as this can vary depending on things such as where the payment is initiated.

Credit Card / Debit Card (online)

Note that HMRC does not allow payments from personal credit cards and will charge a processing fee for corporate credit card payments.

For online payments go to the tax service on Gov.UK where the payment details are entered.  The 17-character reference is not required but the employer is asked to:

  • Enter the 13-character Accounts Office reference
  • Confirm the payment is in respect of 2017/18 tax year
  • Enter the amount to pay

This payment method takes up to 3 days to reach HMRC’s account.

Bank / Building Society

Payments can be made by cash or cheque, with cheques made payable to ‘HM Revenue and Customs only’ followed by the 17-character reference.  Employers must use the Class 1A payslip and not the standard payslip that is used for making the monthly of quarterly PAYE payments.

This payment method takes up to 3 days to reach HMRC’s account.

Post Office

Employers cannot use the Post Office to make Class 1A payments.

Direct Debit

Payments needs to be made as a single payment through the Government Gateway.  This does not require the 17-character reference but when making the payment the employer is asked to:

  • Enter the 13-character Accounts Office reference number
  • Enter the previous tax year and ‘Month 13’

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

Employers can send a cheque by post to HMRC at the following address:

HMRC, Direct, BX5 5BD – yes, this is correct!

Cheques must be made payable to ‘HM Revenue and Customs only’ followed by the 17-character reference and sent with the Class 1A payslip which must be unfolded and separate from the cheque.  If the employer does not have a payslip they can print one using this link(which takes you to the old HMRC Website). Employers can request a receipt by including a letter with the cheque and payslip.

Allow 3 working days for the payment to reach HMRC.

Then, of course, check your online account to ensure that the payment has been received. HMRC say that this should be updated within 6 days.

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