HMRC Direct Debits

zenmaster

I have set up a DD to pay my VAT and it works very well.

I file a return at the end of each quarter and my job is done. HMRC then take the required amount exactly on the due date and I don't have to run the risk of forgetting to make the payment.

I have decided to do the same with PAYE (quarterly) and CT but, when I go to set up a DD online for both of the above, I am asked to input an amount and a payment date. Also for CT there is a reference number which, as I recall, is different every year.

Does this mean that I have to do this each time instead of HMRC working out the due amount/date?

If so then I can't see any advantage over my current method of BACS payment.

TIA

martindow

I think you must be setting up standing orders hence the request for the sum to be sent each month. For direct debits the company who is going to receive the money has to set it up and you (often but not always it seems) are sent paperwork to sign to show your agreement.

CKhalvashi

martindow wrote: »

I think you must be setting up standing orders hence the request for the sum to be sent each month. For direct debits the company who is going to receive the money has to set it up and you (often but not always it seems) are sent paperwork to sign to show your agreement.

Standing Order can be amended with turnover, so this could be the best option.

If your turnover goes down, what you pay goes down with your adjustment.

CK

Wywth

zenmaster wrote: »

I have set up a DD to pay my VAT and it works very well.

I file a return at the end of each quarter and my job is done. HMRC then take the required amount exactly on the due date and I don't have to run the risk of forgetting to make the payment.

I have decided to do the same with PAYE (quarterly) and CT but, when I go to set up a DD online for both of the above, I am asked to input an amount and a payment date. Also for CT there is a reference number which, as I recall, is different every year.

Does this mean that I have to do this each time instead of HMRC working out the due amount/date?

If so then I can't see any advantage over my current method of BACS payment.

TIA

Whilst the VAT system is fully automated (i.e. you submit a VAT return and then the amount due is collected if signed up dor DD), the PAYE & CT systems are not. It appears you still need to inform HMRC each time you wish an amount to be collected, and how much.

This article explains more:
http://www.hmrc.gov.uk/payinghmrc/dd-intro/ndds.htm

Alternatively, just send a payment from your bank account as & when required

QuickKeith

I currently pay our PAYE Monthly and as this changes every month due to hours worked etc it can't be done in advance only by making an online payment which I enter around the start of the month to credit HMRC for around the 19th of the month, also the reference changes every month (guessing same quarterly).

As for Corp Tax, I pay a standing order monthly in advance to try and cover or at least reduce the payment I need to make to make come deadline this helped a lot last year and as I have get 6 months accounts this also helps to work out roughly how much tax I will owe if the following 6 months are similar to the 1st 6 months etc.

As a side issue 6 months accounts are good so can work out if need to 'spend' some money to reduce Corp Tax i.e. extra pension contribution or capital expenditure.

Good Luck with your company.

discountmummy

I manually set up a DD in HMRC to paye PAYE & NI each month ... its very easy

When you are next ready to pay log into HMRC Click on your HMRC Services which should be in the top lefthand corner then click on Direct Debit payment.

This when then take you through to set up Direct Debit payment.
Enter the Bank details and confirm you are authorised to proceed.

Check the details are correct and then select the type of payment required (I use PAYE)

Enter a payment ref, payment amount and payment date. (Dont worry about Year End and Month, this is only if you are paying for a previous period)

Then select next.

This will then set up your direct debit for you. Note I always print the screen that confirms all the details as a record of payment.

So when you come to pay PAYE for the next month the direct debit will be all set up, when you go HMRC services and Direct Debit payment, you just click on the direct debit reference and then select Add payment plan. This will then take you through to enter the payment details for the new months PAYE.

I hope this Helps