Monthly direct debit
Value-Added Tax (VAT)
Revenue collects the direct debit payment for VAT on the third last working day of the month. You cannot select a different deduction date. It is collected in arrears so, for example, the payment collected in January 2023 covers the VAT you owe for December 2022.
Setting up a VAT direct debit
To be eligible to set up a direct debit for VAT you must:
- file and pay any outstanding returns and taxes
- have bi-monthly liabilities of €50,000 or less
- apply through Revenue Online Service (ROS)
- ensure that your monthly payments are large enough to cover your annual VAT amount.
Amending a VAT direct debit
You can change your bank details for your direct debit on ROS. You can increase the amount you pay monthly at any stage during the year on ROS.
You can also decrease the monthly amount, but only up to a maximum of three times during the VAT accounting period. Following a change, the system will update the value of your direct debits for the remaining months of your annual period plus one month.
You can also choose to suspend three direct debit payments during the annual period. You must ensure that after amending or suspending the direct debit you will still meet your expected annual VAT amount. Revenue can charge you interest if there is an underpayment.
Your VAT accounting period ends on 31 October and you decide to reduce your monthly payments on 1 July 2023. The direct debit amounts will change for the remaining months of July to November 2023 only. The months from December 2023 will not change.
You want to amend the amount for the months after the end of your VAT accounting period. You will need to repeat this process in December 2023. The change will then apply for the full year going forward.
Cancelling a VAT direct debit
You can cancel your direct debit at any stage through ROS. Once the direct debit is cancelled, you will receive a short annual return to complete. This allows you to bring your VAT returns up to date before you go back to standard filing.
If you are a direct debit customer, you only have to submit one VAT return per year. The return is due on the 19th day of the month after your VAT accounting period ends. The date of your current filing pattern also determines which month your direct debit will start.
Your VAT accounting period ends 31 December 2023, so you must file your return by 19 January 2024. As your VAT accounting period ends on 31 December 2023:
- you must make 12 monthly direct debit payments to cover from 1 January 2023 to 31 December 2023
- your first payment must be in February 2023 for the VAT you owe for January 2023
-your final payment must be in January 2024 for the VAT you owe for December 2023.
Missed, or unpaid, VAT direct debit payments
Your bank may return your payment as ‘unpaid’. If it does, we will send a letter to inform you that the payment was unsuccessful.
It is your responsibility to pay the missed payment. You can pay the missed payment:
- through ROS
- by debit or credit card.
We may remove you from the direct debit scheme when direct debits are unpaid.
Next: Direct debit procedures for seasonal businesses