So you’ve hired your first employee…go you! 🎉 But now comes the bit no one gets excited about: paying HMRC.
If you’re running payroll, you’re responsible for collecting PAYE (Pay As You Earn) on your employees’ wages, which includes:
Income Tax
Employee National Insurance
Employer National Insurance
Student loan deductions (if applicable)
And more, depending on the employee
The good news? Paying your PAYE bill doesn’t have to be confusing. Here’s how to do it step-by-step, and avoid nasty surprises along the way.
💷 Step 1: Know how much you owe
Each time you run payroll (weekly, monthly, whatever your schedule), your payroll software should generate a report showing exactly what’s due.
At the end of the tax month, log into your HMRC online account to check:
What’s owed
What’s already been paid (if anything)
If any interest or penalties have been added
📆 Step 2: Know when to pay
PAYE is due by the 22nd of the following tax month if you’re paying electronically. If you’re paying by post (hello, time traveller), the deadline is the 19th.
💡 Example:
PAYE for April (6 April – 5 May) is due by 22 May
⚠️ Late payment can mean interest charges and warnings from HMRC. If you miss it repeatedly, fines start stacking.
🏦 Step 3: Pay your PAYE bill
There are several ways to pay — pick the one that suits you best. Here’s the lowdown:
🔹 1. Bank Transfer (BACS, Faster Payments or CHAPS)
Use your 13-character Accounts Office Reference (e.g. 123PA00123456)
Pay into HMRC’s Cumbernauld or Shipley account (depending on your region)
If you’re paying from a UK bank account
You must pay into this HMRC account:
- sort code – 08 32 10
- account number – 12001039
- Account name – HMRC Cumbernauld
If you’re from an overseas bank account
You can make a transfer from your overseas bank account by CHAPS.
You must pay into this HMRC account:
- account number (IBAN) – GB62 BARC 2011 4770 2976 90
- Business Identifier Code (BIC) – BARCGB22
- account name – HMRC Cumbernauld
Overseas payments should be in sterling, and your bank may charge you if you use any other currency.
🔹 2. Through your business banking app
Many banks now let you select “Pay HMRC – PAYE” as a payee. Easy peasy.
🔹 3. By debit or corporate credit card
Use HMRC’s online payment service – Pay now
🔹 4. By Direct Debit
You can set this up in your HMRC account for consistent monthly payments.
🤔 Top tips & common pitfalls
Don’t use your personal UTR — always use your Accounts Office Reference when paying PAYE
Keep a record — save payment confirmations for your accountant (or your future self)
Check for Employment Allowance — some employers get £10,500 off their bill each year. Worth checking!
The Employer’s Allowance allows eligible employers to reduce their annual National Insurance liability by up to £10,500. This reduction is against their Employer Class 1 National Insurance contributions.
Pay early if it’s your first time, to give the banks and HMRC time to link your payment correctly
🧠 Feeling lost? Let us help
If payroll and PAYE are making your head spin, we’re here to help. We support business owners across the UK with friendly, jargon-free payroll and bookkeeping services, and we’ll never judge your spreadsheet.
Book a free call with us to chat through how we can support your business with less stress and more clarity.
Qualified, friendly, and fully in your corner. Supporting business mums and growth-minded owners across the UK with Accounting & Bookkeeping that works for real life.
