HMRC direct debit payment – late payment issue

08 December 2022

As you may be aware, HM Revenue and Customs (HMRC) has recently added direct debit payment capabilities for PAYE liabilities. A positive step forward, however, this has not come without its it issues.

Once set up, the direct debit will not retrieve funds until after the 22nd of the month. This is because the advance notification is not issued until the 20th, or the next available working day. Collection will then happen three working days after the notification has been issued.

As this date will always be after the deadline of the 22nd, late payment interest will begin to show on your business tax account. But don’t worry, this will be removed once funds have cleared into HMRC’s account.

Here is an example timeline given in the latest employer bulletin for December:

  • the advanced notification will be issued on 20 December 2022
  • the direct debit will commence collection on 21 December 2022
  • money will be collected from the bank on 23 December 2022
  • interest for late payment will be removed by 24 December 2022.

No payroll professional wants to see ‘late payment interest’ on their account, so we hope that this error will be resolved as quickly as possible.


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