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Businesses that pay VAT by Direct Debit urged to check email addresses

If you currently pay VAT by Direct Debit and have not provided HMRC with a valid email address, then they will automatically cancel your Direct Debit when they move your VAT record to a new IT system.

If you do want to continue to pay by Direct Debit you will have to file your VAT return electronically by creating a Business Tax Account and set up a new online DD providing a valid email address. This is so that advance notice can be sent to you advising you on how much will be collected from your bank account, and when.

The email address is part of the new Direct Debit service and is required to meet current banking regulations. The time it will take between HMRC telling you how much they will take, and the collection date is too short for them to tell you by post.

Gemma McCaldon-Gower explains – “Businesses that pay their VAT by Direct Debit are reminded to make sure that they have an email address set up with HMRC, or risk the Direct Debit being cancelled, as HMRC migrate to the new system.

“Many businesses benefit from an extra couple of days to pay their VAT bill when paying by Direct Debit, but if the Direct Debit is stopped, they may not notice until after the payment is due, and they could then receive a surcharge for late payment.

“We recommend that businesses check that a valid email address is held by HMRC, as a matter of urgency.

“Businesses that do receive surcharges as a result of this change may be able to appeal, and are urged to contact their usual Cowgills contact.”

VAT by direct debit

The information was correct at time of publishing but may now be out of date.

Posted by Cowgills
1st August, 2022
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