BACS, or the Bankers Automated Clearing System, represents a cornerstone of the UK's financial infrastructure, facilitating electronic transactions directly between bank accounts. This system, a hallmark of security and efficiency in banking transactions, has been operational since 1968, supporting over 100 billion transactions to date.
BACS payments are primarily categorised into two forms: Direct Debit and Direct Credit.
Common Uses of BACS
BACS payments are a staple in regular financial transactions such as:
- Salary deposits
- Pension payments
- State benefits and tax credits disbursements
For Direct Debit, BACS is commonly used for recurring outflows, including subscriptions (like Netflix) and various household bills.
Paying Your Self Assessment Tax Bill via BACS
To settle your Self Assessment tax bill through BACS, your Unique Taxpayer Reference (UTR) number is essential. This number is assigned upon registering for Self Assessment with HMRC. If you've misplaced your UTR or are engaging with HMRC for the first time, it's crucial to register by October 5th in the year following the commencement of your trading activities.
For the payment, you'll need to use the following details depending on the HMRC office:
For HMRC Cumbernauld
- Account Name: HMRC Cumbernauld
- Sort Code: 08-32-10
- Account Number: 12001039
For HMRC Shipley
- Account Name: HMRC Shipley
- Sort Code: 08-32-10
- Account Number: 12001020
Key Points to Remember
- The tax payment deadline is January 31st.
- Issuance of a new UTR may take several weeks.
- BACS payments may require up to three working days to process and reach HMRC.
Cost of Using BACS
Utilizing the BACS system is among the most cost-effective methods for executing payments. To initiate a Direct Credit transaction, you simply need the recipient's full name, bank details (account number and sort code), making it a preferred choice for both businesses and individuals alike.
