What payment reference to use when paying Class 1A National Insurance
When making a payment of Class 1A National Insurance to HMRC it is vital that you use the correct payment reference for them to recognise it and allocate it in the right way.
Payment of Class 1A National Insurance (NI) must be received by HMRC by 19th July following the end of the tax year, or 22nd July if payment is being made electronically.
When you pay your Class 1A National Insurance (NI) electronically it’s important the correct payment reference is used so that HMRC correctly allocates the payment against your Class 1A tax liability. If you use the wrong reference, it’s likely the allocation won’t be right and your Class 1A tax will still show as outstanding even after you have made the payment. In which case, you will still get a letter from HMRC demanding you make payment even when you have already done so!
So, what payment reference should you put when paying Class 1A National Insurance?
To illustrate, we will use an example of making a payment in July 2020, for your 2019/20 Class 1A National Insurance.
The Class 1A National Insurance Payment Reference is made up of three elements as follows:
1) Your Accounts Office Reference Number
The first part of the reference is your Accounts Office Reference Number e.g. 123PA00012345. This is of course, just an example you will have your own unique number which lets HMRC know which business to allocate the payment to
2) The Tax Year
At the end of this number you must indicate what tax year end the payment relates to. In our example the tax year is 2019/20, so we add the 2 digits ‘20’ to the end of the payment reference
3) An Indication that the payment is for Class 1A National Insurance
Finally, we must add the two digits 13 to the end of the payment reference number. This is always 13 regardless of which tax year or which business and lets HMRC know that the payment is intended to pay off Class 1A National Insurance.
So, in our worked example the correct Class 1A payment reference to use would be:
123PA000123452013 with no gaps.
And that’s all there is to it. It’s easy to forget, but It’s crucial when making a payment of Class 1a National Insurance that you follow these three simple steps to use the right Payment Reference Number so that the allocation of your payment sails through with no problems.
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