Pay employers' Class 1A National Insurance
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1. Overview
You must pay Class 1A National Insurance contributions on work benefits you give to your employees, such as a company mobile phone.
You must also pay them on payments of more than £30,000 that you make to employees when their employment ends, such as a redundancy payment (‘termination awards’).
This guide is also available in Welsh (Cymraeg).
You only have to pay Class 1A National Insurance contributions on termination awards if you have not already paid Class 1 National Insurance contributions on them.
There’s different guidance on payment of Class 1A National Insurance on sporting testimonials.
When to pay
When you pay Class 1A National Insurance contributions depends on whether they are work benefits or termination awards.
Work benefits
You need to pay contributions on work benefits by 22 July each year for the previous tax year. You’ll need to pay by 19 July if paying by post.
Termination awards
You pay contributions on termination awards through PAYE.
Pay contributions on work benefits online
You can pay online by:
- approving through your bank account
- Direct Debit (pay automatically or one-off payment)
- debit or corporate credit card
Other ways to pay contributions on work benefits
Make sure you pay HM Revenue and Customs (HMRC) by the deadline. You may have to pay interest and penalties if your payment is late.
The time you need to allow depends on how you pay.
Same or next day
- approve a payment through your online bank account
- online or telephone banking by Faster payments or CHAPS
- online by debit or corporate credit card
3 working days
- Direct Debit (if you’ve set up one for HMRC before)
- online or telephone banking by Bacs
- at your bank or building society
- by cheque through the post
5 working days
- Direct Debit (if you have not set up one for HMRC before)
If the deadline falls on a weekend or bank holiday, your payment must arrive in HMRC’s bank account on the last working day of the week (unless you’re paying by Faster Payments using online or telephone banking).
2. Direct Debit
You can set up a Direct Debit through your HM Revenue and Customs (HMRC) online account to either:
- pay your bill automatically
- make a single payment
You cannot use an existing Direct Debit for standard PAYE payments.
Pay your bill automatically
HMRC will automatically collect the payment from your bank account based on the amount in your return. You’ll only need to set the Direct Debit up once.
Set it up at least 4 working days before your payment due date.
HMRC will usually take the payment either:
- shortly after the 22nd of the month
- 4 working days after you file the return (if you file it after the 19th of the month)
HMRC will tell you the date and amount no later than 3 working days before the payment is collected. The payments will show on your bank statement as ‘HMRC SDDS’.
HMRC will automatically collect the payment from your bank account if you have a Variable Direct Debit for Employers’ PAYE in place.
Make a single payment
You’ll need to give a 17-character payment reference. This starts with your 13-character Accounts Office reference number. You can find this on:
- the letter HMRC sent you when you first registered as an employer
- the front of your payment booklet or the letter from HMRC that replaced it
Add the tax year you want to pay for and the digits ‘13’. If you do not do this, your payment will be allocated to the current tax year instead.
Example
Your Accounts Office reference number is 123PA00012345.
To make a payment for the 2014 to 2015 tax year, add the digits ‘1513’ to your reference number. Your 17-character reference is 123PA000123451513.
Allow 5 working days to process a Direct Debit the first time you set one up. It should take 3 working days the next time if you’re using the same bank details.
3. Approve a payment through your online bank account
You can pay Class 1A National Insurance directly using your online or mobile bank account.
You’ll need to have your banking details ready before you start.
When you’re ready to pay, start your Class 1A National Insurance payment. Select ‘pay by bank account’. You’ll then be directed to sign in to your online or mobile banking account to approve a payment to ‘HMRC Shipley’.
You can select a date to pay, as long as it’s before your payment is due.
Check your account to make sure that the payment has gone out on the correct day. If the payment has not gone out as expected, speak to your bank.
The payment is usually instant but sometimes it takes up to 2 hours to show in your account.
4. Make an online or telephone bank transfer
You can pay by Faster Payments, CHAPS or Bacs to HM Revenue and Customs’ (HMRC) account.
| Sort code | Account number | Account name |
|---|---|---|
| 08 32 10 | 12001039 | HMRC Cumbernauld |
Reference number
You’ll need to give a 17-character number as the payment reference. This starts with your 13-character Accounts Office reference number. Then add the tax year you want to pay for and the digits ‘13’ to make sure your payment is assigned correctly.
| Tax year | Add these digits to your reference number |
|---|---|
| 2013 to 2014 | 1413 |
| 2014 to 2015 | 1513 |
| 2015 to 2016 | 1613 |
Example
Your Accounts Office reference number is 123PA00012345.
To make a payment in July 2015 for the previous 2014 to 2015 tax year, add the digits ‘1513’ to your reference number so that your reference is now 123PA000123451513.
You can find your Accounts Office reference number on:
- the letter HMRC sent you when you first registered as an employer
- the front of your payment booklet or the letter from HMRC that replaced it
You must make a separate payment for Class 1A payments. You cannot add them to a standard PAYE payment.
How long it takes
Payments by Faster Payments (online or telephone banking) usually reach HMRC on the same or next day, including weekends and bank holidays.
CHAPS payments usually reach HMRC the same working day if you pay within your bank’s processing times.
Bacs payments usually take 3 working days.
Check your bank’s transaction limits and processing times before making a payment.
Overseas payments
Use these details to pay from an overseas account:
| Account number (IBAN) | Bank identifier code (BIC) | Account name |
|---|---|---|
| GB62BARC20114770297690 | BARCGB22 | HMRC Cumbernauld |
Some banks will charge you if you do not pay in pound sterling.
HMRC’s banking address is:
Barclays Bank PLC
1 Churchill Place
London
United Kingdom
E14 5HP
5. By debit or corporate credit card online
You can pay online.
There’s a fee if you pay by corporate credit card or corporate debit card. The fee is not refundable.
There’s no fee if you pay by personal debit card.
You cannot pay by personal credit card.
HM Revenue and Customs (HMRC) will accept your payment on the date you make it (even on bank holidays and weekends) - not the date it reaches HMRC’s account.
If you’re unable to pay your Class 1A National Insurance bill in full by card, you should use another payment method like a bank transfer.
Reference number
Make your payment to ‘HMRC Cumbernauld’ office. You’ll need to give a 17-character payment reference. This starts with your 13-character Accounts Office reference number. You can find this on:
- the letter HMRC sent you when you first registered as an employer
- the front of your payment booklet or the letter from HMRC that replaced it
Add the tax year you want to pay for and the digits ‘13’. If you do not do this, your payment will be allocated to the current tax year instead.
Example
Your Accounts Office reference number is 123PA00012345.
To make a payment for the 2014 to 2015 tax year, add the digits ‘1513’ to your reference number. Your 17-character reference is 123PA000123451513.
6. At your bank or building society
You can pay at a branch by cash or cheque.
Make your cheque payable to ‘HM Revenue and Customs only’.
Write your Class 1A payslip reference number on the back of your cheque. You’ll find the reference number on the payslip provided by HMRC.
You must use your Class 1A payslip when paying in. Do not use a standard PAYE payslip from your booklet or your payment will be delayed.
How long it takes
Allow 3 working days for your payment to reach HMRC’s bank account.
7. By cheque through the post
You can send a cheque by post to HM Revenue and Customs (HMRC).
HMRC
Direct
BX5 5BD
You do not need to include a street name, city name or PO box with this address.
Allow 3 working days for your payment to reach HMRC.
What to include
Make your cheque payable to ‘HM Revenue and Customs only’.
Write your Class 1A reference number on the back of the cheque. You’ll find this on your payslip.
Include the payslip HMRC sent you. You cannot use a standard PAYE payslip from your booklet. Do not fold the payslip or cheque or fasten them together.
Your payment may be delayed if you do not fill in your cheque properly.
If you want a receipt, include a note asking for one.
If you do not have a payslip
You can print a payslip to use to pay by post. You cannot use this at a bank.
8. Check your payment has been received
Check your HM Revenue and Customs (HMRC) online account - it should update within 6 working days.
If you’re paying by cheque through the post, you can include a letter with your payment to request a receipt from HMRC.
9. Class 1A contributions on sporting testimonials
A sporting testimonial is an event or series of events to honour a player for their service, such as when the player retires.
The testimonial committee must pay Class 1A National Insurance if the payment to a player is:
- more than £100,000
- not in the player’s contract
The payment is usually the profit from the event.
The committee must pay the contributions on the payment through PAYE.