Measure
From April 2029, the government will require businesses to set up a Direct Debit instruction for HMRC VAT and PAYE return payments. Businesses will retain flexibility in how they pay before the due date but Direct Debit will act as a safeguard to collect any return liability which remains unpaid. The government will review this requirement if Direct Debit is superseded by an alternative automated payment method before the implementation date.
Businesses that are required to make VAT and PAYE return payments to HMRC.
The requirement to set up a Direct Debit instruction will take effect from April 2029. Businesses will be required to have a Direct Debit instruction in place by that date for VAT and PAYE return payments.
While many businesses will be comfortable with the use of Direct Debit as a payment method, some may have reservations about mandating its use as a payment safeguard. A number of businesses have experienced difficulties in reconciling their VAT and RTI accounts with HMRC and may be concerned that mandating Direct Debit could present challenges in this regard, particularly where account discrepancies could lead to unexpected amounts being collected. Businesses would welcome reassurance that these operational considerations will be taken into account ahead of implementation.