Electronic Tax Payments

Some taxes, such as Value Added Tax and corporation tax, must be paid electronically. All the other taxes may be paid electronically. If the business has an online bank account, then this is just a matter of sending off a payment to the bank details given on the payslip or HM Government website.

The business needs to get the bank sort code and the account number right. Since the target bank account is in use by many other businesses, a reference needs to be provided which is based upon the business VAT number or Unique Taxpayer Reference or Accounts Office Reference. This leaves plenty to go wrong, and if the business gets it wrong, then the same tax may need to be paid twice!

We want to avoid this for our clients, so we now generate a customised payment advice on a spreadsheet, and then transfer to the result to an e-mail. Our payment advice is carefully formatted and has lots of cues to minimise the risk of error. It is special to the client’s particular payment, payment reference and deadline. We have retro-tested our system by typing in the sort code and payment number on Google, and checking backwards to see what we get.

Each type of tax payment is colour-coded in pastel colours. VAT is pale green, corporation tax is pale blue, income tax is pale gold, PAYE is cream and Construction Industry Scheme tax is white with a bright green border. These colours match various well-known forms or booklets, namely the VAT100, CT600, P60, P30BC and the PDS. There is also a proforma with our own details if we are asked. This can make our e-mail colourful, but it isn’t for fun: we just don’t want any slip-ups when taxes have to be paid.