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Direct Debit payment

A Direct Debit payment (DD) is an instruction that you give to your bank. It lets them know that you’re authorising a company to collect money from your account. The payment is deducted automatically. 

Unlike standing orders, they’re only used by businesses to set up regular payments. You wouldn’t, for instance, use a Direct Debit to pay your friend your share of rental bills every month. You would, instead, use it to pay the utility companies directly. 

If a company wishes to change the amount or date of payment collection, they have to tell you about it in advance. And if you want to stop paying a Direct Debit, you’ll have to cancel it both with your bank and with the business with whom you’ve set up the bill. 

Can UK taxpayers use a Direct Debit for Self Assessment?

Yes, you can. Here’s how:

  • Log in to your HMRC Online account and set up a DD for any single tax bill payments that you need to make before 31st January
  • If you need to make a Payment on Account, you can set up another debit before 31st July
  • You’ll need to set up these single payment instructions each time you owe money. Be aware that the amount will be different each time

Things to keep in mind

  • You’ll need to use your payment reference: this is your 10-digit UTR number followed by the letter “K”
  • It takes up to five working days for a Direct Debit to process the first time, and three working days next time
  • To cancel your direct debit, you should do it three working days before it’s due to be debited

If you’re ready to set up a Direct Debit to pay your tax bill, just head over to HMRC online and do it directly from there.

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