Making Quarterly Payments of PAYE

For any company that employs staff it is necessary to account for PAYE and NIC deductions and to make any payments periodically to HM Revenue & Customs. For many small businesses this represents a significant administration task, in addition to all the other obligations such as VAT, period end accounting, taxation and so on.

Although there is no avoiding the need to make regular payments of PAYE and National Insurance contributions, provided your average monthly bill comes to less than £1,500, you can opt to pay HMRC on a quarterly basis rather than once a month. This helps to cut down on administration as well as aiding cash flow.

If you are a new employer, you can automatically begin paying quarterly without the need to inform HMRC. If you currently pay monthly and would prefer to pay just quarterly, it may be worth contacting HMRC to request the change, to be sure you are not sent any reminders when they no longer receive your payments monthly.

The only possible down side to paying quarterly is that each payment will be much larger than if monthly payments were made, therefore it is important to ensure enough funds are retained in the bank for payment to be made no later than the 19th of the month.

Just like for monthly payments, come the end of the tax year it is necessary to file an annual return P35 online, together with P14s for each individual employee. This tells HMRC exactly who earned what during the financial year, and whether any payment (or refund) of tax is still due for the year.

Brought to you by N S Bookkeeping & Accountancy of Newcastle.

Making Quarterly Payments of PAYE

For any company that employs staff it is necessary to account for PAYE and NIC deductions and to make any payments periodically to HM Revenue &

Customs. For many small businesses this represents a significant administration task, in addition to all the other obligations such as VAT,

period end accounting, taxation and so on.

Although there is no avoiding the need to make regular payments of PAYE and National Insurance contributions, provided your average monthly bill

comes to less than £1,500, you can opt to pay HMRC on a quarterly basis rather than once a month. This helps to cut down on administration as

well as aiding cash flow.

If you are a new employer, you can automatically begin paying quarterly without the need to inform HMRC. If you currently pay monthly and would

prefer to pay just quarterly, it may be worth contacting HMRC to request the change, to be sure you are not sent any reminders when they no

longer receive your payments monthly.

The only possible down side to paying quarterly is that each payment will be much larger than if monthly payments were made, therefore it is

important to ensure enough funds are retained in the bank for payment to be made no later than the 19th of the month.

Just like for monthly payments, come the end of the tax year it is necessary to file an annual return P35 online, together with P14s for each

individual employee. This tells HMRC exactly who earned what during the financial year, and whether any payment (or refund) of tax is still due

for the year.

Brought to you by N S Bookkeeping & Accountancy of Newcastle.

Share
This entry was posted in Tax and tagged , , , , , . Bookmark the permalink.
  • Steve Asher

    How does this intreact with Modified PAYE arrangements?