Partnerships, small business, Accountancy

Pay your PAYE tax in just 90 seconds: Leveraging Faster Payments for HMRC with BrightPay and Modulr

By Rachel Hynes, Marketing Manager at BrightPay on 8 October 2021   •   4 mins read
<span id="hs_cos_wrapper_name" class="hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_text" style="" data-hs-cos-general-type="meta_field" data-hs-cos-type="text" >Pay your PAYE tax in just 90 seconds: Leveraging Faster Payments for HMRC with BrightPay and Modulr</span>

Modulr's partnership with BrightPay strengthens payroll teams by offering a fast, secure and easy way to make payments part of payroll, and eliminate inefficiencies. 

Critically, our partnership also helps prevent PAYE payments from falling by the wayside. We invited Rachel Hynes, BrightPay's Marketing Manager, to tell us how BrightPay's reporting capabilities, along with the ability to pay HMRC directly from BrightPay using the Modulr platform, help ensure businesses keep on top of their PAYE taxes.

It’s the end of the month or the quarter. Suddenly, it’s time to pay PAYE tax to HMRC. Accountants are in a race against time to ensure their SME clients aren’t penalised for late payment of PAYE taxes, covering all deductions from their salaries and those of their clients. 

But there’s another problem: even if accountants have submitted the deductions by the deadline, the payments, usually made by Bacs or Direct Debit, still need three days to clear. Worse still, miscommunication between accountants and their clients adds complexity into managing payment workflows. Bottlenecks such as clients needing to authorise the payments make late payments more likely.

The initial penalty for the late payment of PAYE tax starts at a 5% surcharge on the total amount due to HMRC. But as accountants are all too aware, the penalties increase for companies that miss the deadline more than once.

Outstanding balances have incurred interest at a rate of 2.6% since April 2020. The more penalties accrued, the higher the final bill. Companies deemed ‘repeat offenders’ are listed publicly on HMRC’s website every year.

However, there is a solution for accountants looking to get their clients back on track in record time. New payment services offer a route to clearing funds and helping businesses pay PAYE tax quickly, avoiding HMRC penalties and reducing pressure on busy accounting firms.

By leveraging ground-breaking payroll software and innovative payment solutions, accountants can utilise the UK’s Faster Payments service to transfer funds rapidly. Here’s how using the new Modulr-BrightPay integration can help ensure PAYE taxes are paid on time, every time and with minimal hassle.

How payroll software helps pay PAYE tax on time

The most innovative payroll software solutions, like BrightPay, already provide dedicated reporting capabilities for companies when recording payments sent to HMRC. 

For each month or quarter of the tax year, accountants can access a comprehensive digital view, covering a detailed summary of the PAYE tax liabilities of each business they represent, including NICs (National Insurance Contributions) and student loan liabilities for every employee.

Additionally, users can add CIS (Construction Industry Scheme) and Employer Allowance deductions, ensuring that accountants can set themselves up to swiftly pay PAYE tax.

But how does a payroll system like BrightPay help to improve communication between accountants and their SME clients?

Improving client communication to reduce payment complexity

By acquiring greater visibility over what’s owed and drawing all of the financial information into one place, accountants can accurately track outstanding payments. As a result, they can quickly spot any discrepancies ahead of time, ensuring payments are always made on time for their clients, strengthening professional relationships.

Clearing up PAYE systems for tax simplicity

On its own, a payroll system like BrightPay does a lot to help simplify the process of paying PAYE tax, but it wouldn’t solve the issue of elongated clearing times that result in penalties from HMRC. That’s why it’s crucial to partner with a fintech that can offer a fully integrated real-time payments platform.  

BrightPay has partnered with Modulr to achieve just that. Accounting firms can pay HMRC directly from BrightPay, which routes payments through the Modulr platform, leveraging the UK Faster Payments network. Payments that may have taken 3 days are processed in just 90 seconds, reducing the risk of fines. 

As the system uses Faster Payments, payments can even be processed on weekends and bank holidays. And Modulr eliminates the need for tedious manual entry which helps finance teams rapidly process payments even if they’re sent on the due date. Accountants can also make last-minute changes should the unexpected happen.

Leveraging the best PAYE systems for tax in the UK

Small businesses can’t afford to incur unnecessary penalties from HMRC and, even with help from accountants, traditional methods of payment make it hard to stay on track. By combining dynamic new tools such as Modulr with BrightPay, accounting firms can ensure that they take advantage of modern payment solutions.

With payments platforms, accountants can rapidly acquire the benefits of recent payments innovation. Firms can thus quickly pay PAYE tax for their clients with next-generation technology, harnessing the power of dependable, 24/7 payment systems to settle outstanding balances faster.

Safeguard your accounts with Modulr, and make rapid PAYE payments

Leverage the power of payments with Modulr’s Payments Dashboard. We’re a trusted fintech partner, processing over £70bn worth of payments to date.

Transfer funds in record time, eliminate manual entry and pay PAYE taxes in under two minutes with a secure, easy-to-deploy payments platform with BrightPay payroll integration.

Get started by contacting Modulr today or by downloading a 60 day free trial of BrightPay here.

Want to learn more about BrightPay benefits and pricing? Read more →