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Payment Methods – Income Tax & Corporation Tax

2 September 2009 No Comment

There are four methods for paying a tax bill

We recommend making payments by bank transfer as this is the most assured way of proving the date and the amount of the tax you have actually paid.

Method 1 – Internet Banking

Make a payment to the Collector of Taxes for the amount required. Depending on the bank, they may already have HMRC Shipley or HMRC Cumbernauld as ready made options, and you should use the Shipley account unless told otherwise. If the bank does not have the precise account details already on the system, then you will need to specify the Collector’s details . . .

account name HMRC Shipley
sort code 08-32-10
account no. 12001020
ref – your unique taxpayer reference number (the UTR)

If it’s a personal payment add a capital letter K to the end of the 10 digit UTR.

12345 67890 K

If it’s a company payment, the 10 digit UTR needs to be followed by the “accounting period”. Please try to follow this format as HMRC is prone to getting your payment, putting it in the wrong place, and then claiming that they didn’t receive it in the first place! Replace the letters NN here with numerical values which we give in our emails.

12345 67890 A001 NN A

If your tax liability is more than £10,000 you may find that you will exceed your bank’s limit on internet transfers. Two smaller amounts paid on two separate days should enable you to work around that problem.

Method 2 – Traditional Cheque and Payslip

Companies are compelled to pay corporation tax electronically with effect from 1 April 2011. You can still use cheques to pay other taxes.

If you have a recent reminder, payslip and prepaid envelope, please use that when making your payment. Write out a cheque for “H M Revenue & Customs” and put your unique taxpayer reference number on the back! Post it in good time so that it arrives by the due date! Thanks.

Method 3 – Debit Card

Use a debit card and pay by phone. Call the Collector of Taxes on 0845 305 1000 and quote your 10 digit unique taxpayer reference number. Then ask for a payment reference number or authorisation code for this payment.

Method 4 – Covering Letter and Cheque

Companies are compelled to pay corporation tax electronically with effect from 1 April 2011. You can still use cheques to pay other taxes.

If you cannot use any of the above methods, please use the dialogue below as the basis for a covering letter (using your normal business letter headed paper) and send it with a cheque, to the Collector. Write out a cheque for “H M Revenue & Customs” and put your unique taxpayer reference number on the back!

The Collector of Taxes
Accounts Office B
Shipley
W Yorkshire
BD98 8AA

Dear Sirs

I enclose a cheque in the sum of AMOUNT which represents tax due on DATE for the period ended YEAREND, under your ref REFNO.

Yours faithfully

.