Ecospend reports ‘substantial’ rise in tax payments to HMRC using Pay by Bank

There has been a “substantial” rise in the number of UK taxpayers using Pay by Bank to make tax payments to HM Revenue & Customs (HMRC) ahead of the 31 January self-assessment deadline, according to new figures from Ecospend, which provides Pay by Bank solutions to HMRC.

Ecospend, which is part of Trustly, has reported that Pay by Bank tax payments increased 36% year-on-year to reach £12 billion in the period from 1 February 2024 to 20 January 2025.

During the same period, more than 3.6 million Pay by Bank transactions were made by taxpayers to HMRC, up 28% on the previous year.

In the first 20 days of January this year, taxpayers sent more than £1.7 billion to HMRC using Pay by Bank, exceeding 500,000 transactions.

According to Trustly’s Ecospend, this is a 39% increase in the value of Pay by Bank transactions from the £1.2 billion sent in the first 20 days of 2024.

In total, around 12 million individuals are expected to submit a self-assessment tax return for the 2023-24 tax year before the 31 January 2025 deadline.

Johan Tjärnberg, group chief executive of Trustly, called the increase in people using Pay by Bank “substantial”.

“The technology is designed to make it quicker and easier to pay taxes. Using Pay by Bank means you enter less information manually, so there is less chance of mistakes. The technology also makes payments more efficient and reduces costs per transaction,” he said.

Tjärnberg added: “HMRC’s use of Pay by Bank is one of the most innovative examples of embedding fintech within a government, setting a global standard.

“The tax authority is able to provide a simple, fast, and secure payment experience with Pay by Bank. We hope to see further use of Pay by Bank in other government departments to help speed up and simplify payments and reduce costs to the public sector.”

Pay by Bank is based on Open Banking APIs and banking infrastructure.

In September last year, Ecospend revealed it has retained its contract with HMRC, meaning it will continue to deliver Open Banking solutions to enhance parts of HMRC’s payment processes.

The original contract was won by Ecospend in 2021, prior to its acquisition by Trustly in 2022.