The short version: A Direct Debit is an instruction you give your bank to let a company take money from your account automatically. It’s how most people pay regular bills like utilities, subscriptions, and yes, tax.
Can I pay my tax bill by Direct Debit?
Yes. You can set up a Direct Debit through your HMRC online account to pay your Self Assessment bill. It’s handy because the money goes out automatically on the due date.
You’ll need to set up a new instruction each time you have a bill to pay. One for your January payment, another for your July payment on account if that applies to you.
What’s the difference between Direct Debit and standing order?
With a standing order, you control the amount and when it goes out. With a Direct Debit, the company can adjust the amount (though they have to tell you first). Direct Debits also come with a guarantee, so you can get your money back if something goes wrong.
Any downsides?
Make sure there’s enough in your account when the payment is due. A failed Direct Debit can mean late payment penalties and a hit to your credit score.
Want help setting up the right payment method for your tax? We can walk you through it.
