HMRC Payment Methods 2026 | How to Pay Your Tax Bill

Key Before You Start

• Deadline: The payment deadline for your Self Assessment tax bill is 31 January. Use our UK Self Assessment Deadline Checker to stay on track.
• Reference: You must quote your UTR (Unique Taxpayer Reference) followed by a ‘K’ as the payment reference. For example, if your UTR is 1234567890, your reference is 1234567890K. Using the wrong reference is a common reason for payments going missing. If you can’t find your UTR, see our guide: How to Find Your UTR Number.
• Avoid Credit Cards: HMRC no longer accepts personal credit cards for tax payments.

Method 1: Direct Debit

Direct Debit is one of the simplest and safest ways to pay, as you can set it up in advance.

• Single Payment: You can set up a one-off Direct Debit to pay your current tax bill.
• Budget Payment Plan: You can set up a plan to pay your tax bill in installments over the year. This is a good option if you want to avoid a large lump-sum payment.
• Payments on Account: You can use Direct Debit for your ‘payments on account’ to spread the cost.

To set it up, log in to your HMRC online account and select the Direct Debit option.

Method 2: Bank Transfer (Online or Telephone Banking)

This is a very common method, but it’s crucial to get the details right.

For Faster Payments or BACS (Bank to Bank):

• Account Name: HMRC (or your specific tax type, check your statement)
• Sort Code: You must use HMRC’s specific sort code for Self Assessment. This can be found on the HMRC website.
• Account Number: Use the specific account number for your tax type.
• Reference: This is the most critical part. Your payment reference must be your 10-digit UTR followed by the letter ‘K’.

Processing Times:

• Faster Payments: Usually cleared the same day or the next working day.
• BACS: Takes 3 working days. Check our guide on HMRC Processing Times for more details.

Method 3: Debit Card

You can pay by debit card online through your HMRC online account or via the HMRC app. This is a secure and immediate way to pay.

• Accepted: Most UK debit cards.
• Not Accepted: Personal credit cards.

Method 4: Cheque

While digital payments are preferred, you can still pay by cheque.

• Make it Payable: ‘HM Revenue & Customs’ (use the full name).
• Write Your Reference: Write your UTR followed by a ‘K’ on the back of the cheque.
• Send It To: You must send your cheque to the specific HMRC address for Self Assessment payments.

Method 5: Through Your Tax Code

If you are an employee and have an outstanding tax bill, HMRC may be able to collect it by adjusting your tax code for the next year. This is called ‘coding out’ and is only available for certain amounts.

• Pros: Spreads the cost over the year.
• Cons: It reduces your monthly take-home pay.
• Eligibility: You can only use this if you owe less than £3,000.

What Payment Method is Best?

What if You Can’t Pay? Late Payment Penalties & Interest

If you are unable to pay your tax bill in full by the 31 January deadline, it’s crucial not to simply ignore it.

• Interest: HMRC will charge interest on late payment. The current rate is set by HMRC and can change. As of January 2026, the late payment interest rate is 7.75% (Base Rate + 4%), while the repayment interest rate is 2.75% (Base Rate – 1%). Our guide on HMRC Interest Charges explains this in detail.
• Penalties: You will also incur late payment penalties. The amount depends on how late the payment is. Read our guide on How to Avoid HMRC Penalties in UK.

Need Help Managing Your Tax Payments?

We help clients plan for their tax bills throughout the year so there are no surprises in January.

This guide is intended for informational purposes and is based on UK tax regulations as of June 2026. Tax laws and government systems are subject to change. Always consult with a qualified professional regarding your specific financial situation. Right Tax Returns is an ACCA-registered firm.