PAYE72050 - PAYE operation: payments for PAYE purposes: payment on account

Employers must send an FPS for any payments made 鈥榦n account鈥� 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
Or
  • 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.

Salary advance schemes are an exception to this process, please see PAYE72053