Functionality to allow employers to set up a recurring direct debit to pay PAYE and national insurance liabilities will launch early in October.

A variable payment plan for PAYE and NIC liabilities would be introduced from 19 September 2022. However, there have been some delays and HMRC now expects the functionality to be available in early October. The current system allows only a single payment to be made by direct debit.

First, HMRC has confirmed that the direct debit amount will be the figure declared on returns submitted by employers/payroll agents, or a lesser figure if any overpayments have been allocated to reduce the original declaration. The direct debit will never be greater than the value declared on the return and can never be more than £20m, in accordance with direct debit BACS rules.

Second, the money will be drawn on 23 of each month, or the next bank working day. The employer will receive an advance notice three days in advance of every collection date, to ensure they are notified of the amount being collected. There will be no additional interest charged to employers who choose to pay by variable direct debit payment plan, provided that their direct debit payment does not dishonour for whatever reason, (ie, insufficient funds, bank account closed, etc.).

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