Nichola Ross Martin's Tax Consultancy

PAYE: paying HMRC: what reference should I use?

If an incorrect payment reference is used, HMRC cannot tell where to allocate payment and an automatic late payment tax penalty will apply. 

What reference do to use? 

For example:

An employer’s payment reference is 123PA00012345, it will need to add a suffix to explain to HMRC which month a payment relates to. 

• April 2012 is month 01 of the 2011/12 tax year, however the PAYE months commence on the 6^thof each month.
• Payment of PAYE for the period 6 April 2011 to 5 May 2011 (month 01) is due by 22 May 2011.

In order to ensure that a payment for month 01 of 2011/12 is allocated correctly the employer is required to add 1201 to his payment reference, this makes 123PA000123451201.

Paying PAYE/NICs for an earlier year

For example

If, an employer realises in May 2011 that he has made an underpayment for January 2011 in the previous tax year.

• January 2011 falls into the tax year 2010/11; by May 2011 when payment is actually made the 2010/11 year has ended.
• 13 is used instead of the actual month number for January 2011.

The employer will need to add the suffix 1113 to his reference, 11 for the year, and 13 in substitute for the actual month making the payment reference 123PA000123451113.

One-off payments: PAYE settlement Agreements and Penalties
• The reference number to use should appear in the format ZA123456789012 on the payslip sent to by HMRC (don't use this one it is just an example).
• If no reference or payslip is provided contact the tax office.