Revenue has advised us of upcoming changes to its direct debit payment facility. Revenue intends to cease offering a fixed direct debit payment option over the coming months and will move to variable direct debits. The main difference is that Revenue will request the exact value of the monthly liability due from a taxpayer’s bank account, rather than a fixed amount each month, ensuring that the taxpayer pays the right tax at the right time and will not be at risk of interest applying for underpayments of tax.
It is intended to commence the direct debit modernisation with employer income tax/PRSI/USC/LPT as it is already used by the majority of employers to pay their monthly employer liabilities. The last collection under the current fixed direct debit mandate will be in January 2025 for 2024.
Taxpayers must set up a new variable direct debit mandate by 31 January 2025, for 2025. Any fixed direct debit mandates not updated by this deadline will be cancelled automatically by Revenue and any taxpayer who has not set up a variable direct debit mandate will be at risk of incurring a tax debt and interest.
Revenue intends to issue a notice to taxpayers from the week of the 18 November 2024 to inform them of the change and the action required to update their direct debit mandate for 2025.
Revenue has advised that the fastest and most secure way for a taxpayer to provide a new mandate is online, as follows:
i. The taxpayer must cancel their existing fixed direct debit for employers (PAYE) tax by logging in to ROS, selecting the “My Services” page, clicking on “Manage Bank Accounts” and following the steps provided to select “SEPA Direct Debit –Cancel.”; then
ii. The taxpayer must set up a new variable direct debit mandate by following the previous steps to SEPA Direct Debit and select “Create a Variable Direct Debit Instruction”.
It is expected that the transition to variable direct debit for VAT and income tax is likely to begin from mid-2025.
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