Thursday, July 02, 2009

Paying tax by direct debit

Having recently discovered that one can set up a direct debit with HMRC I did this right away, (perhaps somewhat naively) assuming that I would no longer have to worry about/bother with six-monthly payments.

However, as it turns out, the six-monthly payment liability doesn't go away (although the amount to pay is reduced by whatever DD payments have been made in the preceding months).

Sorry if this is obvious to others - it wasn't to me until I spoke to HMRC this afternoon.

On further reflection, their so-called Direct Debit is in fact more like a Standing Order (they also refer to it as budget payment plan), i.e. the tax payer specifies the amount he or she intends to pay.

Why they call it Direct Debit is a mystery.