HMRC’s August Employer Bulletin has put a practical payroll deadline back in front of employers: PAYE Settlement Agreement payments for the tax year ended 5 April 2026 must clear into HMRC’s account by 22 October 2026.
That date matters, but the more useful warning is not just the deadline. HMRC also reminds employers that PSA payments need the specific PSA reference, for example a reference beginning with XA, from the payslip HMRC sends. If an employer uses the normal PAYE Accounts Office reference instead, HMRC says the payment will be allocated to the standard PAYE account and the employer can continue to receive reminders for the PSA even though money has left the bank.
For busy SMEs, construction firms and labour-heavy businesses, this is exactly the kind of small payroll control that causes avoidable friction. The tax may have been calculated. The payment may even have been made. But if the reference is wrong, the evidence trail is messy, the liability may still appear open, and someone has to spend time proving what happened.
A PAYE Settlement Agreement allows an employer to make one annual payment to cover tax and National Insurance due on small or irregular taxable expenses or benefits provided to employees.
For 2025 to 2026 PSAs, HMRC says electronic payments must clear by 22 October 2026. Late payment can trigger interest and late-payment penalties.
HMRC’s bulletin also makes the reference-control point clear: employers should use the PSA reference from the payslip, not the normal PAYE Accounts Office reference. If the wrong reference is used, the payment can be credited to the wrong account.
This sits alongside wider employer-payroll issues in the same bulletin, including P11D and P11D(b) follow-up, benefits-in-kind payrolling preparation, business visitor PAYE guidance and tax-fraud warnings for employers and agencies approached with “cheaper” payroll models.
Payroll compliance is increasingly an evidence discipline.
The employers that stay out of trouble are not just the ones that pay. They are the ones that can show what was due, what was approved, what reference was used, when funds cleared and who reconciled the account afterwards.
A PSA is a good example because it often covers items that feel peripheral: staff entertaining, small gifts, irregular taxable benefits and other items that do not always sit neatly in monthly payroll routines. That makes ownership easy to blur between finance, payroll, HR and external advisers.
When the payment window approaches, weak process creates three risks.
First, missed deadlines. If the PSA calculation is left too late, the payment may not clear by 22 October.
Second, misallocated payments. Using the wrong HMRC reference can create avoidable chasing, confusion and reconciliation work.
Third, poor records. If the business cannot show how the PSA figure was built, approved and paid, it loses control of the audit trail.
That matters even more for businesses using external payroll support, agency labour, umbrella providers or complex site-based teams. HMRC’s recent employer messaging is not moving towards lighter touch. It is moving towards cleaner records, clearer responsibility and stronger due diligence.
Employers should treat the PSA deadline as a control check now, not a diary reminder for October.
A clean process should confirm whether the business has a PSA for 2025 to 2026, identify the correct HMRC PSA reference, agree who owns the payment, schedule the bank transfer early enough for cleared funds and save proof of payment with the calculation and approval trail.
Finance teams should also check that PSA payments are not being made with the normal PAYE Accounts Office reference. That is a small mistake with a disproportionate admin cost.
For payroll-heavy businesses, this is also a useful moment to review the wider employer calendar: P11D clean-up, benefits-in-kind preparation, PAYE deadlines, adviser access, worker records and labour-supply-chain due diligence.
The PSA deadline is not complicated. That is exactly why businesses get caught by it.
HMRC has given employers the date and the reference warning. The commercial lesson is simple: payroll control is not just calculation; it is payment discipline, evidence and reconciliation.
If your payroll, expenses or HMRC-payment process needs tightening before deadlines become problems, contact Genius on 020 7700 2000 or hello@geniusmoney.co.uk.
