Direct Debit Payment

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.

  • 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.

Frequently Asked Questions

  • Is a Direct Debit an instant payment?

    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!

  • What do I need to set up a Direct Debit for Income Tax?

    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.

Search More Terms

News & Insights

6 days ago
Are you considering whether to buy or lease a company vehicle?  Both options have their pros and cons, and it’s impo...
Are you considering whether to buy or lease a company vehicle?  Both options have their pros and cons, and it’s important to know the tax implications beforehand.  Read on to find out how each decision affects your business! ...
1 week ago
Received a notice about an overdue confirmation statement? Don’t worry! It’s a common occurrence and, thankfully...
Received a notice about an overdue confirmation statement? Don’t worry! It’s a common occurrence and, thankfully, doesn’t come with late filing fees. Let’s walk through how you can quickly and easily file your limi...
2 weeks ago
With the Labour Party coming to power, there are a lot of questions and uncertainty around what the labour government ef...
With the Labour Party coming to power, there are a lot of questions and uncertainty around what the labour government effect on businesses will be and what the economy may look like, given that they haven’t been in power since 2...
2 weeks ago
Have you ever asked yourself, ‘what happens if my business has a HMRC enquiry’? Receiving a letter from HMRC stating...
Have you ever asked yourself, ‘what happens if my business has a HMRC enquiry’? Receiving a letter from HMRC stating that they want to check the accuracy of your most recent accounts can be a very daunting experience. Even if ...
2 weeks ago
Many UK businesses ask themselves the question, ‘why is My Company Tax Bill So High?’. You’ve probably asked yours...
Many UK businesses ask themselves the question, ‘why is My Company Tax Bill So High?’. You’ve probably asked yourself this question too. Especially if you’ve found your way to this article. This article aims at highlightin...
3 weeks ago
Running a business in the current economic climate can be challenging so the idea of voluntarily registering for another...
Running a business in the current economic climate can be challenging so the idea of voluntarily registering for another tax may seem counterintuitive at first.  However, many savvy business owners are leveraging the benefits...
3 weeks ago
Most limited company directors have a director’s loan account (DLA), but not everyone understands what it is. In t...
Most limited company directors have a director’s loan account (DLA), but not everyone understands what it is. In this article, we will outline the main concept of the director’s loan account and how it affects both you...
4 weeks ago
One of the reasons many people start their own business is for the freedom and flexibility that comes with being your ow...
One of the reasons many people start their own business is for the freedom and flexibility that comes with being your own boss. But what happens when you are looking to start a family? Are you entitled to Maternity pay? If you are...

Subscribe Now

Receive our latest news & insights directly to your fingertips.