PAYE90010 - Reconcile individual: underpayments: voluntary direct payments

The Voluntary Direct Payments procedures can refer to voluntary payments for

  • Coded out underpayments following end of year reconciliation
  • Customers can send a voluntary payment to pay all or part of an underpayment that is successfully coded into a future year.
  • Underpayments that cannot be coded out up to and including tax years 2016 to 2017
  • From 2016 to 2017 Simple Assessment has been introduced as a legislative method of collecting underpayments on PAYE that cannot be collected by a tax code. This will replace the current voluntary payment process where there is an underpayment which cannot be coded.

If an individual prefers to make payment directly rather than have any underpayment included in their tax code they can make payment either

  • Online, using a credit/debit card or Pay by Bank.  The P800 tax calculation will advise customers if they can do this online
  • Directly by bank transfer
  • By cheque

Payment reference number

Where an individual makes a voluntary direct payment by cheque or bank transfer outside of their online account, they must quote the correct 17-character payment reference number to allow automatic allocation.  The payment reference must include:

  • National Insurance number 
  • The form reference 'P800'
  • And the financial tax year starting in which the underpayment arose

For payments relating to the 2025 to 2026 financial tax year, the reference must end with 2025.

Example QQ123456BP8002025

Underpayments carried forward

The payment reference year is the final tax year in which the underpayment is carried forward to.  

Where an underpayment has accumulated over more than one year and has been carried forward, the reference year is the final year in which the underpayment is carried forward to.

For example, if an underpayment arises in 2022 to 2023 and is carried forward into 2023 to 2024, it will combine with any new underpayment for that tax year.  The payment reference year in this example will be 2023.  If the underpayment is then carried forward into 2024 to 2025, the reference tax year will be 2024. 


The procedure can also be used to collect tax arising on income received by the estate of a deceased person during the period of administration. These payments will not be accounted for on the PAYE Service.

Where a year is reconciled underpaid and a voluntary payment exists on a record which covers the amount underpaid, this will be set against the new reconciliation result.

Where a voluntary payment exists on a year which is reconciled underpaid the system will check

  • Where the voluntary payment is more than the underpayment value (including tolerances) the system will allocate the payment and repay the remaining value to the customer
  • Where the voluntary payment is less than the underpayment amount and reduces the underpayment amount to a value within PAYE tolerance the year will be reconciled balanced
  • Where the voluntary payment is less than the underpayment amount and reduces the payment to a value which can be coded, the voluntary payment will be allocated and the remaining underpaid amount collected via the tax code
  • If the remaining underpayment cannot be collected via the tax code a Simple Assessment charge will be created for the full value of the underpayment and any existing voluntary payment will be repaid to the customer

Where a customer wants to pay an In Year Adjustment directly and the In Year Adjustment arose in CY, offer the customer a cumulative code. If the In Year Adjustment arose in CY-1 (for example, it is currently being collected through the customer's code) and the customer is unwilling to wait for auto reconciliation before making payment, offer the customer an early review. The customer will need to send in any documents we need to make the review.