The legislation requires that everyone who has a set is obliged to pay the fee annually, but we allow people to pay it in instalments if they prefer. The fee applies per household. When someone buys a television we are notified of their purchase and their name and address. If that household does not have a licence, we then write to them asking them to license themselves.
Of course, as in Canada and no doubt elsewhere in the world, the vast majority of homes in the U.K. have a television licence. We do write to every home in the U.K. each year to ask them to renew their television licence. That's how the licence fee is collected.
Most people now have simply arranged to pay their licence fee by direct debit from their bank account, so it's not a very onerous requirement for them. We also accept payments over the counter, by cheque, by cash, by credit card, and online.