The short answer: trace it, do not pay twice
If your care agency has paid its PAYE and the HMRC employer account still shows the charge outstanding, treat it as a payment to trace, not a payment to repeat. In our experience the money has reached HMRC and landed against the wrong period or the wrong tax, and the fix is to find it and have it reallocated, not to adjust the payroll so the figures appear to agree. The one exception is a payment that never actually left your bank, which you do re-send, with the correct reference so it lands properly the second time.
That distinction matters because a care agency rarely has spare cash sitting idle. Pay HMRC twice to make a red balance go away and you have tied up a payroll run's worth of money that you then have to reclaim, often weeks later. The disciplined move is slower for an afternoon and far cheaper over the month. For the wider picture of how we keep an agency's payroll and HMRC account clean, our care agency accountants page sets out the recurring work, and our payroll and PAYE service covers the submissions and reconciliation behind it.
Did the money actually leave your account?
Before anything else, prove the payment left your bank, because that decides everything that follows. Open the business account and find the debit: the date it cleared, the exact amount, and the reference that was attached to it. If there is no debit, the payment failed and was never made, and the task is simply to re-send it correctly. If the debit is there, the money is HMRC's problem to locate, and you have the evidence to make them.
Timing also tells you whether to worry yet. A payment made by online or telephone banking through Faster Payments will usually reach HMRC the same or next day, a CHAPS payment the same working day, while Bacs takes about three working days. So a payment you sent yesterday by Faster Payments and cannot see today may simply be in transit, but one sent a week ago and still missing has arrived somewhere and needs tracing. Work the path below before you reach for the chequebook or the payroll software.
Reading the path from the top keeps you honest about which problem you actually have. Most agencies that call us have a payment that left the bank cleanly, which means the answer is never to pay again, it is to find where the credit landed and have it moved.
The 17 character reference and why HMRC parks a payment
Here is the mechanism almost no one explains plainly. Your accounts office reference is 13 characters and identifies your PAYE scheme. When you pay early or late, HMRC asks you to add four extra numbers to that 13 character reference, making 17 in total, and those four numbers tell it which period the money is for: the last two digits of the tax year it ends in, then the tax month number. Get those four digits wrong, or leave them off a standing bank payment set up months ago, and the payment still arrives, it just lands on the wrong month.
HMRC is blunt about the consequence: if you use the wrong reference, the payment "may be delayed or used to pay a different tax bill that you owe". That is the whole puzzle in one line. The money is not lost, it is allocated against another period or another tax, and the charge you were aiming at still reads as unpaid. For a care agency paying fortnightly, where several runs can share one standing payment template, one stale period code can throw a run of payments onto the wrong lines before anyone reconciles.
The worked tool below is the one we use internally when a payment goes missing. Fill it in from the bank statement and your payroll records before you call HMRC, because it turns a vague "a payment is missing" into a specific "this amount, paid on this date, with this reference, belongs against this period".
Missing PAYE payment tracing checklist: what to record, and what it tells you.
| What to check | Where to find it | What it proves |
|---|---|---|
| Date the money left your account | Business bank statement | Paid, and roughly when it should have shown |
| Exact amount paid | Bank debit line | The figure HMRC is looking for |
| Reference used (all 17 characters) | Payment or standing instruction | Whether the period code was right |
| Period the payment was meant for | Payroll records, FPS for that month | The charge it should be sitting against |
| Where it actually landed | HMRC online employer account | The wrong period or tax to move it from |
| Who sent it | Your records or the old accountant | Whether a standing template needs fixing |
What a missing payment costs while it sits unallocated
The reason not to leave a missing payment alone is that HMRC can charge interest on the balance it still treats as unpaid, even though your money is sitting on another line. The late payment interest rate is 7.75 percent from 9 January 2026, set at the Bank of England base rate plus four percentage points. It is not a huge daily number on a single month's PAYE, but it runs quietly, and on a care agency's monthly charge it adds up faster than owners expect if the payment is left unallocated for a quarter or more.
The point the chart makes is about speed, not size. Trace and reallocate the payment quickly and the interest is a rounding error, because once the credit is moved to the right period the charge is treated as settled from its original date and the interest should drop away. Leave it for months and you are paying to borrow money you already handed over. That is why we reconcile the HMRC account against the bank every period rather than once a year, so a misallocated payment is caught in days, not discovered at year end.
Who to call, and what to have ready
Once you have proof the money left your account and a view of where it landed, the quickest route is the phone. HMRC runs a dedicated employer PAYE and National Insurance payment enquiries line on 0300 200 3200, open Monday to Friday 8am to 6pm, which deals with payroll payment errors including reallocations. Have your accounts office reference, the payment date and the exact amount in front of you, because the adviser needs those to find the credit.
Ask for two things specifically: for the payment to be traced from the date and amount you can see on your bank statement, and for it to be reallocated to the period it was meant for. Keep a note of the call, the date, and the name of the adviser, because a reallocation is not always instant and you may need to chase it. If the payment was sent under an old standing instruction with a stale reference, fix that template at the same time so the next run does not repeat the error.
When it is a disputed charge, not a lost payment
Sometimes the problem is not a payment gone astray but a charge that is wrong in the first place. If HMRC's figure for what you owe does not match what your payroll actually reported, that is a different job: you are not tracing a credit, you are correcting the charge. HMRC has a route for exactly this, where you dispute an employer PAYE charge by submitting the Full Payment Submission totals from your payroll software for the year in question, and HMRC comes back within about 40 working days.
The two problems can look identical from the outside, a balance that seems too high, so the first ten minutes of work is deciding which one you have. If the bank shows you paid and HMRC shows the money elsewhere, it is a tracing and reallocation job. If your records show the charge itself is overstated, it is a dispute. Running the dispute route on what is really a misallocated payment, or trying to trace a payment when the charge is genuinely wrong, wastes weeks, which is the main reason it is worth getting a second pair of eyes on the account before you act.
How the common ways of handling a missing PAYE payment actually compare:
| When a payment goes missing | Pay again to clear it | Generic accountant | LOYALS care specialist |
|---|---|---|---|
| Checks the bank before acting | ✗ Pays twice | ● Eventually | ✓ First step |
| Traces by reference and period code | ✗ | ● If asked | ✓ As standard |
| Asks HMRC to reallocate, not refile | ✗ | ● | ✓ Reallocation first |
| Fixes the standing reference so it stops recurring | ✗ | ✗ | ✓ Template corrected |
| Reconciles HMRC to bank every period | ✗ | ✗ Year end only | ✓ Every period |
| Cash tied up while it is sorted | ✗ A full run | ● Sometimes | ✓ None, no double payment |
The difference is not cleverness, it is order of operations: prove the payment, find it, move it, and only re-pay when the bank says it never left.
A realistic tracing timeline
Tracing a payment is not instant, but it is predictable, and knowing the shape of it stops you panicking into a second payment. Here is how a typical trace runs once you have spotted the gap, assuming the money did leave your account.
A realistic sequence for tracing and reallocating a care agency PAYE payment:
| Stage | What happens | When |
|---|---|---|
| Spot the gap | Charge shows unpaid after the payment should have cleared | Day 0 |
| Confirm the debit | Bank statement checked for date, amount and reference | Same day |
| Locate the credit | HMRC online account checked for the wrong period or tax | Day 1 |
| Call HMRC | Payment enquiries line, ask for trace and reallocation | Days 1 to 2 |
| Reallocation applied | Credit moved to the correct period, charge cleared | Within a few weeks |
| Fix the cause | Standing reference corrected so the next run is right | Before next payday |
One date is worth holding in view while you do this. Monthly PAYE is due to reach HMRC by the 22nd of the next tax month when you pay electronically, so if a traced payment sits unresolved as the next deadline approaches, make that next payment cleanly with the correct reference rather than letting a second one go astray on top of the first.
If you run a domiciliary or supported living agency and want the payroll, submissions and HMRC account handled by a team that works only with care and health businesses, our care agency accountants page shows how the recurring reconciliation is built so a payment never goes missing unnoticed in the first place.
What this means for you: finding the credit
If a PAYE payment has vanished from your HMRC balance, work it in order rather than reaching for the fastest way to make the red number disappear.
- Prove it left the bank. Find the debit, the date, the amount and the reference, and keep that as your evidence before you do anything else.
- Read the reference. Check the full 17 characters and the four digit period code, because a wrong code is the usual reason the money is on the wrong line.
- Locate the credit. Look at your HMRC employer account for the payment landing on a different month or a different tax.
- Ask for a reallocation. Call the payment enquiries line with your reference, date and amount, and ask for the credit to be moved, not for the charge to be refiled.
- Fix the cause. Correct the standing reference so the next fortnightly run does not repeat the error.
Done in that order, a missing payment is an afternoon's work and costs you nothing extra. Reach for a second payment instead and you lose a payroll run's worth of cash until you can claw it back. LOYALS is a King's Cross firm of accountants and business consultants, and we run the payroll, submissions and HMRC account reconciliation for domiciliary care agencies across London, catching a misallocated payment within the period rather than at year end. Ask our payroll and PAYE team to trace the missing payment and reconcile the HMRC account with you.