How to Concatenate DateTime to nvarchar field
Datetime without punctuation and up to 7 second decimals are 21 digits so there would be 1 character (32 - 10 - 21) still missing.

You can use the following to format the way you want. 

Update Bil_ReturnsRepository Set 
    PaymentReference = CONVERT(NVARCHAR(32), 
        CONCAT(
            LEFT(PolicyNumber, 10), 
            FORMAT(SYSDATETIME(), 'yyyyMMddHHmmssfffffff0')))
Where 
    PolicyNumber = '1234567890'


If PolicyNumber is already NVARCHAR then there is no need to do an explicit CONVERT. Notice that I hard-coded the last zero.