HMRC have published Issue 39 of their Employer Bulletin which among other things highlights payment arrangements for PAYE Settlement Agreements.

PAYE Settlement Agreements for 2010-11 should be made by 19 October or 21 October, depending on whether you're paying by traditional or electronic means respectively.

Otherwise you risk being charged interest and a late payment penalty. The key issue is not to have the settlement agreement figure confused with the regular PAYE/NIC payment. HMRC are requesting that taxpayers are careful to use the payslip and settlement agreement reference in respect of the amount due.

The employer bulletin also notes that from April 2012 HMRC will be able to collect debts up to the value of £2999.99 by amending the tax code of individuals in PAYE employment or receiving a UK-based pension. This method of recovery for Self Assessment (SA) debts and Tax Credit (TC) overpayments will apply from April 2012. The first PAYE coding notices to include these changes will be issued from January 2012.

The employer bulletin is available at http://www.hmrc.gov.uk/paye/employer-bulletin/bulletin39.pdf.