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.

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.

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.

Ofgem is the energy regulator for Great Britain and works to protect energy consumers and ensure they are treated fairly.

Under the terms of Ofgem’s Standard Licence Conditions, customers may challenge increased direct debit payment amounts with their supplier and ask the supplier to justify how they calculated the new amount. Suppliers must explain clearly how they reached the figure they want to charge and give the meter readings used. If a customer is not happy with the supplier’s calculation, they can ask the supplier to lower the monthly payments to reflect the energy use more accurately.

If a customer is concerned about the size of a credit balance on their energy account, they can ask their supplier to refund it.

The Government believes that our mission to deliver clean power by 2030 is the best way to break our dependence on global fossil fuel markets and bring down energy bills, and therefore direct debits, permanently.

In the year to June 2025, Ofgem data shows that there has been a fall by around £500m of credit balances held by suppliers (Domestic Energy Customer Credit Balances, July 2024 to June 2025 | Ofgem)

Customers may challenge increased direct debit payment amounts with their supplier if they disagree with it and ask the supplier to justify how they calculated the new amount. Suppliers must explain clearly how they reached the figure they want to charge and give the meter readings they used. If a customer is not happy with the supplier’s calculation, they can ask the supplier to lower the monthly payments to reflect the energy use more accurately.

Additionally, if a customer is concerned about the size of a credit balance on their energy account, they can ask their supplier to refund it. Suppliers must do this promptly unless there are reasonable grounds not to and the supplier must explain the reasons for not doing so.

When Vehicle Excise Duty (VED) is paid monthly or six-monthly, rather than annually, the cost to the exchequer is higher because of lost interest. To reflect this impact on the public finances, the previous government introduced in 2014 an extra charge for monthly and six-monthly VED payments to make up for the lost interest

The Government annually reviews the rates and thresholds of taxes and reliefs to ensure that they are appropriate and reflect the current state of the economy. The Chancellor makes decisions on tax policy at fiscal events in the context of the public finances.

While the Driver and Vehicle Licensing Agency administers and collects vehicle excise duty (VED) on behalf of HM Treasury, decisions on VED, whether structure, rates or alternatives are a matter for the Chancellor of the Exchequer.

Paying VED by direct debit allows motorists to spread the cost, helping families and businesses in managing their finances. Those who choose to use direct debit pay a low surcharge of five per cent against the annual rate of duty for the vehicle. Typically, a motorist is better off paying by direct debit instead of buying two six-month vehicle licences which if not purchased by direct debit, carry a surcharge of 10 per cent.

The monthly average of vehicle keepers that choose to pay their VED by direct debit is just over 39 per cent.

Television licences are issued on an annual basis and households can choose a variety of payment plans to spread the cost of the licence, including monthly and quarterly payment plans.

New joiners to TV Licensing’s monthly direct debit scheme pay for their first licence over 6 months. This front-loading of payments is a requirement set out in legislation. After the initial 6 months of joining the scheme, households pay towards their next licence through payments spread over 12 months. This is intended to reduce the BBC’s exposure to unexpected changes in its income that could result from households stopping their fee payments part-way through the year, and which could impact the BBC’s ability to deliver its services for the public.

The Government recognises the financial difficulties faced by some households. This is why we announced a significant extension to the Simple Payment Plan to support more households by enabling them to split up the annual licence fee payment into more manageable fortnightly and monthly instalments. This payment plan does not require front-loading. The changes, which came into effect in February 2025, make a greater number of households eligible for the Plan.

The Secretary of State is a strong supporter of the BBC and has been clear that the BBC must be funded by a model that is sustainable and fair to all those that are paying it. The Government is keeping an open mind about the future of the licence fee, and the forthcoming Charter Review will provide an opportunity for the Government to consider the best possible funding model to set the BBC up for success long into the future.

Television licences are issued on an annual basis and households can choose a variety of payment plans to spread the cost of the licence, including monthly and quarterly payment plans.

New joiners to TV Licensing’s monthly direct debit scheme pay for their first licence over 6 months. This front-loading of payments is a requirement set out in legislation. After the initial 6 months of joining the scheme, households pay towards their next licence through payments spread over 12 months. This is intended to reduce the BBC’s exposure to unexpected changes in its income that could result from households stopping their fee payments part-way through the year, and which could impact the BBC’s ability to deliver its services for the public.

The Government recognises the financial difficulties faced by some households. This is why we announced a significant extension to the Simple Payment Plan to support more households by enabling them to split up the annual licence fee payment into more manageable fortnightly and monthly instalments. This payment plan does not require front-loading. The changes, which came into effect in February 2025, make a greater number of households eligible for the Plan.

The Secretary of State is a strong supporter of the BBC and has been clear that the BBC must be funded by a model that is sustainable and fair to all those that are paying it. The Government is keeping an open mind about the future of the licence fee, and the forthcoming Charter Review will provide an opportunity for the Government to consider the best possible funding model to set the BBC up for success long into the future.

The Department has no plans to investigate National Health Service penalty charges resulting from errors in direct debits for prescriptions.

Only the 12-month Prescription Prepayment Certificate (PPC) can be paid for by direct debit, and there are processes in place to ensure individuals who pay for their PPC via direct debit are informed of the procedures and their responsibilities.

The NHS Business Services Authority (NHSBSA) administers PPCs on behalf of the Department. A patient’s PPC and payments automatically renew unless it is: requested or cancelled by the certificate holder; there is an outstanding balance to be paid on a PPC; or if the holder is turning 60 years old within nine months of their certificate expiring. In these instances, the individual will be notified by letter before the end date of their existing certificate. Where a patient is turning 60 years old within nine months of their certificate expiring, they are advised of alternative routes to exemption to cover the period until they are entitled to the age exemption.

Only where the individual fails to manually renew their PPC but continues to claim free prescriptions after the expiry date of their PPC, will a penalty charge be issued by the NHSBSA.

The Child Maintenance Service (CMS) will do everything it can to address the nonpayment of child maintenance. Where payments have defaulted, we use our enforcement powers fairly and quickly to get cases back into payment.

The Department publishes quarterly Child Maintenance Service (CMS) statistics, with the latest statistics available to the end of December 2024 here. Table 4 contains information on the amount of child maintenance that Paying parents have paid, and are expected to pay, each quarter.

Information on the method of payments used by Paying Parents and Collect and Pay compliance can be found on Stat Xplore

The full information requested is not readily available and to provide it would incur disproportionate cost.

The Child Maintenance Service (CMS) will do everything it can to address the nonpayment of child maintenance. Where payments have defaulted, we use our enforcement powers fairly and quickly to get cases back into payment.

The Department publishes quarterly Child Maintenance Service (CMS) statistics, with the latest statistics available to the end of December 2024 here. Table 4 contains information on the amount of child maintenance that Paying parents have paid, and are expected to pay, each quarter.

Information on the method of payments used by Paying Parents and Collect and Pay compliance can be found on Stat Xplore

The full information requested is not readily available and to provide it would incur disproportionate cost.

Direct Debits are subject to rules made by Pay.UK, a private sector payment system operator that is regulated by the Bank of England and Payment Systems Regulator.

In order to receive Direct Debit payments, businesses and other organisations must be ‘sponsored’ by a Payment Service Provider (usually their bank or building society). Businesses undergo stringent checks to ensure their identity and that they understand their responsibilities and obligations when using the Direct Debit scheme. If a business does not comply with the rules Pay.UK has a range of sanctions available, including removing the business from the service altogether if necessary.

In the case of any incorrect or fraudulent payments, the account holder is entitled to an immediate refund of any unauthorised amounts collected from their account provider under the Direct Debit Guarantee scheme. Further information about Direct Debits is available at: www.directdebit.co.uk.

I refer the Honourable Member to the answer given on 18 December 2024 to PQ UIN 20062.

The government believes there should be strong protections in place to ensure that customers can make payments in a secure and informed way. There are already such protections in place for Direct Debit payments under the rules made by its operator, Pay.UK, which is regulated by the Bank of England and the Payment Systems Regulator. As such, the government does not currently have plans to legislate in this area.

Under these rules, when a Direct Debit is established the receiving organisation is required to verify that the Direct Debit instruction has been authorised by the payment account holder. Notice of the amounts and dates of collection for each Direct Debit payment must also be given to customers in advance, unless otherwise agreed, enabling customers to review their upcoming outgoing payments and plan ahead.  In the case of any incorrect or fraudulent payments, the account holder is entitled to an immediate refund of any unauthorised amounts collected from their account provider under the Direct Debit Guarantee scheme. Further information about Direct Debits is available at: www.directdebit.co.uk

The government believes there should be strong protections in place to ensure that customers can make payments in a secure and informed way. There are already such protections in place for Direct Debit payments under the rules made by its operator, Pay.UK, which is regulated by the Bank of England and the Payment Systems Regulator. As such, the government does not currently have plans to legislate in this area.

Under these rules, when a Direct Debit is established the receiving organisation is required to verify that the Direct Debit instruction has been authorised by the payment account holder. Notice of the amounts and dates of collection for each Direct Debit payment must also be given to customers in advance, unless otherwise agreed, enabling customers to review their upcoming outgoing payments and plan ahead.  In the case of any incorrect or fraudulent payments, the account holder is entitled to an immediate refund of any unauthorised amounts collected from their account provider under the Direct Debit Guarantee scheme. Further information about Direct Debits is available at: www.directdebit.co.uk

The government believes there should be strong protections in place to ensure that customers can make payments in a secure and informed way. There are already such protections in place for Direct Debit payments under the rules made by its operator, Pay.UK, which is regulated by the Bank of England and the Payment Systems Regulator. As such, the government does not currently have plans to legislate in this area.

Under these rules, when a Direct Debit is established the receiving organisation is required to verify that the Direct Debit instruction has been authorised by the payment account holder. Notice of the amounts and dates of collection for each Direct Debit payment must also be given to customers in advance, unless otherwise agreed, enabling customers to review their upcoming outgoing payments and plan ahead.  In the case of any incorrect or fraudulent payments, the account holder is entitled to an immediate refund of any unauthorised amounts collected from their account provider under the Direct Debit Guarantee scheme. Further information about Direct Debits is available at: www.directdebit.co.uk

As the independent regulator, Ofgem requires British Gas and other energy providers to refund a domestic customer’s credit balance promptly unless they have reasonable grounds not to, which must be explained to the customer. Customers may also review the level of their direct debit payments at any time by taking a meter reading and contacting their provider. This Department does not hold information on the amount of customers’ credit balances held by energy providers.

The aim of a direct debit payment arrangement should be for the customer to have a zero balance on their accounts at the end of a year.

In August 2022, Ofgem changed the licence conditions on suppliers to ensure that direct debits are based on the best and most current information available. Energy suppliers typically review their customers’ direct debit arrangements twice a year and this should be based on an actual meter reading to ensure payments are set at the correct level to avoid a large credit or debit balance building up.