A demand turns up for a month you settled weeks ago, and your bank statement says it went. Most of the time the money did arrive and it is sitting against the wrong thing. Here is how to work out which, before you pay anything twice.
A second payment does not cancel the first. It lands on the same account as a credit, the month HMRC is chasing often stays open anyway, and you are out of pocket while somebody works out where it all went. If your own records genuinely show a shortfall, pay that as soon as you can, because interest or a penalty can follow late PAYE. If they do not show one, check before you transfer anything.
HMRC does not build your bill from your bank statement. It builds it from what you filed, then sets your payments against that. So a bill that looks wrong means the filing and the payment have stopped agreeing somewhere, and there are only a handful of places where that happens. Each one leaves a different fingerprint, which is what makes this quick to diagnose once you know what you are looking at.
UK PAYE runs on tax months, and a tax month runs from the 6th of one month to the 5th of the next. Month 1 is 6 April to 5 May. That is already out of step with your calendar and your bank feed, which is where a lot of this starts.
Your Accounts Office reference is thirteen characters and it identifies the employer, not the period. On an ordinary payment arriving in its normal window, HMRC works out the period from when the money turns up. Pay early, pay late, or clear two months in one transfer, and it has to be told, which is what the four extra digits on the end are for.
The tell. Your total paid across the year looks right, but one month shows arrears and another shows a credit of a suspiciously similar size.
This is the first item on HMRC's own list of reasons a PAYE bill is not what you expected, and it is the easiest one to make. A charge falls in the tax month of the pay date you reported, not the date you sent the report. A payday of 4 April belongs to the tax month ending 5 April even if you filed it a fortnight later, and a payday of 6 April belongs to the next one. Put the wrong date on the Full Payment Submission and the whole charge moves months with it.
The tell. Two consecutive months are wrong by roughly the same amount in opposite directions, and the pay date on the submission does not match the date on the payslip.
Some things reduce what you owe, and none of them apply themselves. Statutory maternity or paternity pay you are entitled to recover, Construction Industry Scheme deductions suffered, the Employment Allowance: HMRC learns about all of it from an Employer Payment Summary and from nowhere else. Send no EPS and the charge stands at the full figure from your Full Payment Submission, which is exactly the number that gets demanded.
Timing counts as much as content here. A reduction only comes off the current month if the EPS reaches HMRC before the 19th of that tax month. File it on the 20th and the relief is real and the money is right, but the month still reads as unpaid until the next bill catches up.
The tell. The shortfall is close to a figure you recognise, because it is the relief you thought you had already claimed.
Every employee needs a payroll ID and it needs to stay theirs. Change payroll software, renumber the staff list, or reuse an ID that once belonged to a leaver, and HMRC can open a second employment record for the same person. The pay gets counted twice, and so does the tax on it.
If you are giving somebody a new payroll ID, set the payroll ID change indicator so the old record and the new one are joined up. Without it your software is reporting a new starter as far as HMRC is concerned. Duplicates are often cleared once later submissions land, which is why the order below says check, then wait a little, rather than phone immediately.
The tell. The demand is not slightly wrong, it is wildly wrong, and the excess is about one person's worth of tax.
Thirteen characters say who is paying. Four say what the payment is for. Both halves matter on anything that is not landing in its usual window, and the second half is the one that gets left off.
123PA000123452702
123PA00012345 is the Accounts Office reference. It is on your HMRC letters and in your online account, and it identifies the employer.
2702 is the period. The first two digits are the last two of the tax year the payment covers, so 27 is the year ending April 2027. The last two are the tax month, so 02 is 6 May to 5 June. HMRC's own worked example is 2502, meaning the year ending 2025, month 2.
Quarterly payers use the month the quarter ends on, so the quarter running 6 April to 5 July 2024 was referenced 2503. If you pay through HMRC's online service it works the four digits out for you, which is a good reason to use it for anything out of the ordinary.
While you are in there, check the date you are working to. Paying electronically, cleared funds have to reach HMRC by the 22nd of the next tax month. By post, the cheque has to be there by the 19th. If you usually pay less than £1,500 a month you may be able to pay quarterly instead, and the date is then the 22nd after the quarter ends. Paying on the right day with the wrong reference still causes this, so the two go together.
At that point ring the Employer Helpline on 0300 200 3200, or +44 151 268 0558 from outside the UK, Monday to Friday between 8am and 6pm. Have the payment reference, the amount and the date it left your account in front of you, and ask them to trace it and put it against the period you intended. That call is short when you can tell them what you think happened. It is long when you cannot.
On an ordinary UK PAYE scheme, whether that sits under a UK subsidiary or an overseas employer registered here, everything above applies unchanged. On a direct payment scheme it does not land the same way. A DPNI scheme is registered in the employee's name, so the letter goes to a person rather than a finance team, and usually to a person who has never had a conversation with HMRC in their life and has no way of judging whether the demand is right. They then have to decide on their own whether to pay it.
That is worth knowing before it happens, because on those schemes HMRC pursues the employee. It is also one of the better arguments for the employer paying to have the scheme run properly rather than handing it over with a link to the guidance.
Not if your own records say you have already paid. A second payment sits on the account as a credit and leaves you short while the original month stays open, so you end up with two things to unpick instead of one. If the checking shows a genuine shortfall, pay that part quickly, because interest or a penalty can follow late PAYE.
The thirteen characters are your Accounts Office reference and they identify the employer. The four extra digits identify the period the payment covers: the last two digits of the tax year, then the tax month, or the month the quarter ends on if you pay quarterly. HMRC's example is 2502, meaning the tax year ending 2025, month 2. You need them on early and late payments, and HMRC's online service works them out for you.
HMRC's guidance is that some incorrect bills sort themselves out once later submissions land, and it asks you to give it until the 12th of the next tax month before asking for help. Use that time to do the checks above rather than to hope. If it is still wrong on the 12th, ring, because there is nothing to gain from waiting longer.
Yes, and it is often harder to spot, because the person filing the submissions is not the person making the bank payment. If the filing sits with a bureau and the transfer sits with you, agree in writing who reads the HMRC account each month and who chases a mismatch. The unwatched gap between the two is where most of these bills come from, and our payroll guide covers the rest of the monthly rhythm.
This page is general information, not tax, legal or employment advice. The deadlines and thresholds given are the ones in force for the 2026/27 tax year, and HMRC's own guidance is the authority on any of them. Your own position may differ, so please check it or get advice before acting.
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