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HMRC internal manual

PAYE Manual

PAYE operation: payments for PAYE purposes: payment on account

Employers must send an FPS for any payments made ‘on account’ of PAYE income. That is, payments made before they are due to be paid.

You may need to decide whether a payment is

  • On account of earnings, where the employer has no right of recovery, in which case tax should be deducted


  • A loan which is not classed as employment income but is for something else. Tax should not be deducted from the loan but from the earnings when they are paid. Where a loan is not repaid, the employer needs to consider whether to report it as a Benefit in Kind.