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As highlighted in Tip 34 PAYE should be paid on time each month to avoid late payment penalties.

However, to avoid getting caught out by bank holidays and weekends, ensure that payment is made early when the normal payment day falls on a bank holiday or a weekend.

When this happens, the payment (or in the case of electronic payments, cleared funds) must reach HMRC by the last working day before the bank holiday or weekend on which the normal payment day falls.

Where payment is made electronically, payment should be sent early in August 2015 and November 2015 to allow for the fact that the 22nd falls on a weekend (unless the Faster Payment service is used). If payment is made by cheque, it should be made early in July 2015, September 2015, December 2015 and March 2016 to be on the safe side as 19th falls on a weekend.

Example:
Jake pays his PAYE by cheque each month, posting the cheque on the 16th of the month to allow sufficient time for posting. His payment for PAYE month 5 (month to 5 September 2015) must reach HMRC by 19 September 2015.
However, as this falls on a Saturday, in reality it must reach HMRC the previous Friday (18 September 2015).

Jake must therefore post his cheque by 15 September rather than 16 September to ensure it reaches HMRC on time.

If the cheque arrived on Saturday 19 September, it would be treated by HMRC as having been received on Monday 21 September and the payment would be regarded as late. If Jake then paid late on one more occasion during 2015/16, he would suffer a late payment penalty.

This can be avoided by posting the cheque a few days early when the normal payment date falls on a weekend (or by making the payment electronically to take advantage of the later deadline).