VAT & PAYE: Direct debit could become mandatory

The government is consulting on proposals that would require most VAT-registered businesses and employers to pay their VAT and PAYE liabilities by direct debit.

The aim is to reduce late payments and simplify the payment process, but the changes could affect how many businesses manage their tax payments.

The consultation is open until 16 August 2026. If introduced, the proposals could mean changes to payment processes and penalties for non-compliance.