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HMRC internal manual

PAYE Manual

PAYE operation: PAYE direct payment: ending PAYE direct payment arrangement

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When a Direct Payment scheme is to be closed
 

Advise the Employer section of the

  • Taxpayer’s name
  • Accounts Office Reference
  • Employer PAYE reference of the Direct Payment Scheme
  • The date of cessation

 

Where the employment is continuing

  • Set up an SA record for the taxpayer or arrange for the SA section to set up the record
  • Issue a letter based on the drafts below
     

Taxpayer not responsible for own NIC

 

‘As you no longer wish to operate PAYE for yourself / As it appears you have failed to operate PAYE properly for yourself …

… the PAYE Direct Payment Arrangements have now been ended. After 5 April you will receive a Self Assessment return.’
 

Taxpayer responsible for own NIC

‘As you no longer wish to operate PAYE for yourself / As it appears you have failed to operate PAYE properly for yourself …

… the PAYE Direct Payment Arrangements have now been ended. After 5 April you will receive a Self Assessment return.

You are however still required to calculate your own National Insurance contributions by reference to the National Insurance Contributions tables sent to you and to pay the amount to Banking Operations every quarter. You should also enter NI in the tax code space on the Deductions Working Sheet and should continue to use the sheet to record the amount of the National Insurance contributions.’