Are your PAYE payments reaching the right place?

Sep 28, 2022 | Payroll

Are your PAYE payments reaching the right place?

Have you ever received a letter chasing for payment of your PAYE when you know you have paid it?

When making PAYE payments, it is vital that your 13-character Accounts Office reference number is shown, or your payments may not be recognised and will languish indefinitely in a black hole until you ring and claim it.

If you are paying on time, you just need to quote your 13-character Accounts Office reference, this can be found on:

the letter HMRC sent you when you first registered as an employer
if you use a payment book, it is shown on the front of the booklet
your business tax account if you have added Employer PAYE enrolment to it
your payroll software
speak to your PAYE agent is someone runs your payroll for you

What to do if you pay monthly but are late making your payment

If you are not paying the current period, you need to add 4 extra characters onto the end of your reference. These final 4 characters will show the year and month/quarter your payment is for this will make the reference 17 characters.

Example: for the tax year 2022/23 you are late paying 6 May to 5 June (Mth 2), your reference would be your 13-digit reference plus 2302 i.e., 111AB000000002302 (ref for example only)

As each tax period has a different payment reference number, if you have more than one payment to make, make two separate payments using the correct reference.

Tax Periods

6 Apr to 5 May, use 01
6 May to 5 Jun, use 02
6 Jun to 5Jul, use 03
6 Jul to 5 Aug, use 04
6 Aug to 5 Sept, use 05
6 Sept to 5 Oct, use 06
6 Oct to 5 Nov, use 07
6 Nov to 5 Dec, use 08
6 Dec to 5 Jan, use 09
6 Jan to 5 Feb, use 10
6 Feb to 5 Mar, use 11
6 Mar to 5 Apr, use 12

What to do if you pay quarterly but are late making your payment

The same applies as above, except you will need to quote the tax year and the relevant quarter number as follows:

6 Apr to 5 Jul, use 03
6 Jul to 5 Oct, use 06
6 Oct to 5 Jan, use 09
6 Jan to 5 Apr, use 12

Example: for the tax year 2022/23 you are late paying quarter end 5 October 2022 (Qtr 2), your reference would be your 13-digit reference plus 2306 – i.e., 111AB000000002306 (ref for example only)

Do not fall foul of accruing interest payments for payments you have already made. Use the correct reference and save yourself a whole lot of hassle trying to sort it out.

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ABOUT SUE

Sue Haynes is the founder of Cactus Bookkeeping and helps business owners
with all aspects of Bookkeeping to save them time so they can concentrate on running their
business. Sue is licensed, regulated and supported by the Institute of Certified Bookkeepers (ICB)

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Minimum Wage, Statutory Pay and Deduction Thresholds 2022-23

Apr 2, 2022 | All Categories, National Minimum Wage, Payroll

Minimum Wage, Statutory Pay and Deduction Thresholds 2022-23

Minimum Wage Rates

The rates change on 1^st April each year and the hourly rate for the minimum wage depends on your age and whether you are an apprentice.

You must be at least:

school leaving age to get the National Minimum Wage
aged 23 to get the National Living Wage – the minimum wage will still apply for workers aged 22 and under

✻ National Living Wage (aged 23 and over) has increased 6.60% to £9.50 per hour

✻ 21 to 22 will receive a 9.80% rise to £9.18 per hour

✻ 18 to 20 will receive a 4.10% rise to £6.83 per hour

✻ Under 18’s will receive a 4.10% increase to £4.81 per hour

✻ Apprentices will receive a 11.90% rise to £4.81 per hour**

Apprentices are entitled to the apprentice rate if they are:

aged under 19
aged 19 or over and in the first year of their apprenticeship

Example – An apprentice aged 21 in the first year of their apprenticeship is entitled to a minimum hourly rate of £4.81.

Apprentices are entitled to the minimum wage for their age if they both:

are aged 19 or over
have completed the first year of their apprenticeship

Example – An apprentice aged 21 who has completed the first year of their apprenticeship is entitled to a minimum hourly rate of £9.18.

Statutory Pay Rates

Statutory Sick Pay (SSP) is £99.35 per week, with the amount due based on the number of working days in the week.

Statutory Maternity Pay (SMP) and Statutory Adoption Pay (SAP) remains the same at 90% of the employee’s average weekly earnings (AWE) for the first 6 weeks. The statutory weekly rate for all weeks after this will be the lower of 90% of AWE or £156.66.

Statutory Paternity Pay (SPP), Statutory Shared Parental Pay (ShPP) and Statutory Parental Bereavement Pay (SPBP) all have the same weekly rate of £156.66 or 90% of AWE, whichever is lower.

PAYE Rates

Personal Allowance is £12,570 for the year. Employees can earn £1,048 monthly or £242 weekly free of tax

The standard tax code is 1257L

20% tax is due on earnings between £12,571 and £37,700 per year

40% tax is due on earnings between £37,701 and £150,000 per year

45% tax is due on earnings in excess of £150,000 per year

NIC Rates

Employer National Insurance contributions at 15.05% (including 1.25% increase for social care) are due on employee’s earnings over £9,100 per annum, £758 per month or £175 per week

No Employer NI contributions are due on earnings of apprentices under 25, employees aged under 21, or veterans of the Armed Forces in the first 12 months of their civilian employment

Employee National Insurance contributions at 13.25% (including 1.25% increase for social care) are due on their earnings over £9,880 per annum, £823 per month or £190 per week

If you require any further assistance with payroll and compliance, please get in touch via https://www.cactusbookkeeping.uk/contact/

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ABOUT SUE

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