How could new “open banking enhancements” benefit your business?
28 Sep 2023
Your business could benefit from a new scheme being run by HM Revenue & Customs (HMRC).
The newly introduced “open banking enhancements” allow businesses to reduce their immediate paying obligations and pay their tax bills in manageable portions.
Managing taxes efficiently is crucial for any business and the ability to schedule payments means that the cash flow burdens of early payments no longer need to affect your business finances.
Which taxes can be scheduled?
You can now schedule your payments for:
- Pay As You Earn (PAYE)
- PAYE settlement agreements
- PAYE late payment or filing penalty
- Class 1A National Insurance Contributions (NICs)
Although currently unavailable, HMRC also plans to introduce scheduled payment services for:
- Capital Gains Tax
- Simple Assessment
- Corporation Tax
- Soft drinks industry levy
- Plastic Packaging Tax
Advantages of scheduling tax payments for your business
- Convenience: Scheduling payments to HMRC means you no longer must remember payment deadlines or manually process transactions. Payments are automatically deducted from your account, saving you time and administrative effort.
- Cash flow management: Scheduling allows you to know exactly when payments will be taken from your account, aiding in better financial planning. This predictability in your outgoings can be an advantage for cash flow management, helping you allocate resources more effectively.
- Compliance: Late payments can result in penalties and disrupt your business operations. By scheduling your contributions, the chances of missing a payment are significantly reduced. This ensures you stay compliant with tax regulations, avoiding unnecessary fines and maintaining a clean financial record.
- Eligibility: Most businesses with a UK bank account are eligible to schedule payments and set up a Direct Debit with HMRC.
Direct Debit payments
Setting up a Direct Debit to pay your tax bills is simple and has many of the same benefits as scheduling singular payments.
To do so, log in to your HMRC account, navigate to the relevant tax section, and follow the prompts to set up a new Direct Debit instruction.
Once set up, you’ll receive confirmation, and future payments will be automated, simplifying your obligations and reducing your financial stress.
Using HMRC’s Direct Debit and scheduling services offers several benefits like convenience, improved cash flow management, and ensured compliance.
Simplifying tax payments allows you to focus on what matters most – running your business successfully.
A qualified accountant can help you set up scheduled payments through the new “open banking enhancements” and streamline your tax paying obligations.
To receive expert advice on simplifying your tax payments, please contact one of our accounting team.