A Direct Debit payment is an instruction that you give to your bank, letting them know that you’re authorising a company to collect money from your account, either as a one off payment or a regular charge. The payment is then 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. 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.
You can also use Direct Debit Payments to pay your Self Assessment tax bill.
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.
No. If you are paying a bill via Direct Debit, you’ll need to allow 5 working days for the payment to arrive with the company or tax agency you are trying to pay. If you want to cancel a Direct Debit, you will also need to allow 3 working days for the cancellation to take effect, so don’t leave it to the day before the payment is due to go out!
You’ll just need the details of the account you are making your tax payment to, as well as your Unique Taxpayer Reference number, all of which can be found on your Self Assessment tax return.