For deductions made in periods beginning after 5 April 2000, employers can pay quarterly if their average monthly payments to the Inland Revenue are less than £1,500. The previous limit was £1,000.

This change was announced by the Chancellor of the Exchequer on Budget Day and the necessary regulations have now been laid.

The changes also apply to payments by contractors in the construction industry.


1. Employers who reasonably believe that their average monthly payments to the Inland Revenue of PAYE, NIC, etc are less than #1,500 in total can choose to make payments to the Inland Revenue quarterly rather than monthly. This applies to deductions made in periods beginning after 5 April 2000. The previous limit was £1,000.

2. From 6 April the quarterly payments limit will be based on an employer’s average net monthly payment due to the Inland Revenue for PAYE, NICs and student loans (CSL) recovered, but after taking into account amounts of Working Families’ Tax Credit (WFTC) and Disabled Person’s Tax Credit (DPTC) paid to their employees and funded from the tax, NICs and CSL due to the Revenue.

3. Employers who choose to pay quarterly are required to make payments for the tax quarters ending 5 July, 5 October, 5 January and 5 April. The PAYE and NIC for each quarter must then be paid to the Inland Revenue by the 19th of these months.

4. Contractors in the construction industry can also choose to pay quarterly provided that their average monthly payments to the Inland Revenue of deductions from payments to subcontractors, PAYE, NIC, and CSL recovered are less than £1,500 in total, after taking into account WFTC and DPTC funded from what is due to the Revenue.

5. Employers and contractors who want to find out more about quarterly payments should contact the Employer Helpline (0845 7 143 143) or consult the Employer’s quick guide to PAYE (cards CWG 1) – card 18.


1. The new limit was announced by the Chancellor on Budget Day – 21 March (see Inland Revenue Budget Note of 21 March: “Help for Small Employers – Increase in Quarterly Payments Limit for PAYE”).

2. The increase will give an additional 80,000 small employers the opportunity to pay quarterly, improving their cash flow and reducing administrative costs. This will bring the total number of employers who could benefit to nearly 800,000 – around 60 per cent of all employers

3. The Regulations are entitled:

“The Income Tax (Employments) (Amendment) Regulations 2000” (SI 2000 No 1152)

“The Income Tax (Subcontractors in the Construction Industry) (Amendment) Regulations 2000” (SI 2000 No 1151)

“The Social Security (Contributions) (Amendment No. 5) Regulations 2000” (SI 2000 No 1149) and

“The Social Security (Contributions) (Amendment No. 5) (Northern Ireland) Regulations 2000” (SI 2000 No 1150).

Copies will be available shortly from the Stationery Office.

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