How to set up direct debit tax payments
Find out how to spread the cost of your annual tax liability
If you’ve been self-employed for a while you’re probably used to the January and July payments on account. You should put away a certain amount for every cheque or invoice paid towards the dreaded tax bill so when the deadline comes round you’re not left with a nasty hole in your finances.
Budget Payment Plan
Direct debit installments are also an option with the government’s Budget Payment Plan. As long as your tax payments are up to date, you can sign up. It’s totally flexible and you make the decision of how much you want to pay off your tax bill and how often.
You choose your own weekly or monthly amount, and you can take a payment holiday or cancel altogether at any time. You can also set up a direct debit to simply take the full amount from your account if you’d rather not send in a cheque.
Direct Debit Guarantee
Paying by direct debit ensures that you are covered by the Direct Debit Guarantee. To find out more click here.
To use the service you’ll need to register with HMRC for online services at www.hmrc.gov.uk if you haven’t done so already.
Once you’re registered log on to Self-Assessment Online and select direct debit payment from the menu. You’ll also need the following to hand:
- Your 11-character taxpayer reference
- Your bank or building society sort code and account number
- Details of how much, and when you want to pay