Paying VAT by Direct Debit – check your HMRC records

9th June 2021

HMRC are in the process of moving VAT records for non-MTD registered traders from their old database to a new one.

 

Due to banking requirements if HMRC does not hold a valid e-mail address for a trader, when the data is transferred to the new database, any existing direct debit mandate will be cancelled. Any trader effected will need to set-up a new mandate through their business tax account when prompted or make payment via an alternative method.

 

HMRC expect the exercise to take place between July to November 2021 so traders will not know when they need to set-up a new direct debit and are advised that they in advance of any VAT return to ensure the direct debit has not been cancelled.

 

HMRC are sending two different letters which will depend on whether a trader is registered for Making Tax Digital or not. The letter will explain the situation and what the trader will need to do.

 

Agents are not permitted to set-up direct debits on their client’s behalf due to HMRC security requirements so to ensure your direct debit continues please check your business’s business tax account as soon as possible.

 

Please speak to your Whiting & Partners contact if you are unsure whether this affects your business.

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