HM Revenue & Customs (HMRC) is issuing fresh alerts to employers, about making sure that reference numbers on PAYE payments are correct so that they can be recognised accordingly.

Each payment reference number is unique to the employer, and the accounting period that the payment relates to.

HMRC uses these references to allocate payments and to help process taxes related to PAYE as efficiently as possible.

The use of incorrect PAYE reference numbers could lead to penalties and charges, even if the employer has paid on time.

In addition, and to complicate matters further, online banking services may default to a previous payment reference and so employers should check that the correct reference is shown each time a payment is made to HMRC.

Checking if the payment reference number is correct

Businesses need to make sure that they use the correct Accounts Office reference, which can be located on:

  • the letter HMRC issue when the business first registered as an employer.
  • the front of their payment booklet.
  • the letter from HMRC that replaced the booklet; or,
  • their Business Tax Account if they’ve already added Employer PAYE enrolment to it.

Where an employer is not paying for the current period, they need to add four additional characters to the end of the reference number that indicates the year and the month, or quarter that the payment should be allocated against.

Each tax period has a different payment reference number, so it’s important to make separate payments for each period.

Ensuring the correct reference is applied each time you make a PAYE payment to HMRC, is not as easy as it might sound, and can be confusing.

HMRC is trying to help businesses to get it right, and businesses can use it’s ‘Pay now’ tool on GOV.UK to find the right reference number to use each time.

Alternatively, if this is an administrative burden you could do without when you are busy running your business, you may want to consider outsourcing your payroll to a team of dedicated professionals.

At GH Payscheme, we operate a BACS-approved payroll bureau, and pay advice service, that supports businesses in Bedfordshire, Cambridgeshire, Hertfordshire, and throughout the UK.

Running your payroll compliantly and ensuring that your employees and HMRC are paid accurately and on time need not be a headache. We can process your payroll, no matter your headcount, and ensure your PAYE liabilities are met.

To discuss your payroll requirements with one of our payroll advisers, contact us today on 01767 220199 or at

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