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Written question asked by Wendy Morton (Conservative) on Monday, 6 July 2026, in the House of Commons. It was due for an answer on Wednesday, 8 July 2026. It was answered by Dan Tomlinson (Labour) on Tuesday, 14 July 2026 on behalf of the Treasury.

Business: Direct Debits

Question

To ask the Chancellor of the Exchequer, what assessment has been made of the impact of mandatory Direct Debit payments on (a) businesses without access to mainstream banking services, (b) rural businesses and (c) financially excluded businesses; and whether her Department has consulted (i) the Financial Conduct Authority and (ii) banking providers.

Answer

The government is consulting on proposals to require payment of VAT and PAYE return liabilities by Direct Debit.

No decisions have been taken on the design of any future compliance or enforcement framework. The consultation seeks views on a range of issues, including possible incentives and sanctions to encourage compliance.

The consultation also considers whether exemptions or alternative arrangements may be required for particular taxpayers, and any practical barriers to using Direct Debit. This includes seeking evidence on circumstances where businesses may face challenges in making payments by Direct Debit and welcomes responses from all interested parties, including charities, representative bodies and other organisations, including the financial sector.

The consultation is intended to inform the detailed design of any future policy and implementation framework. As part of this process, the government is seeking evidence on operational impacts, implementation costs and potential exceptions, and stakeholders are encouraged to provide relevant information through the consultation. No final decisions have been taken, and the government will consider consultation responses before determining next steps.

Secondary information

Type
Written question
Reference
15995
Session
2026-27
Grouped for answer
Yes
Subjects
Bank services Business Payments Public consultation Financial Conduct Authority Direct debits
Link
View this Written question on www.parliament.uk