If you’ve recently had a letter from HMRC about your VAT direct debit being cancelled, you should not disregard it.

Be reassured that this particular communication is legitimate and take prompt action to ensure that your VAT liabilities continue to be met. Where VAT payments are missed, penalties may apply.

‘Important notice – your VAT direct debit’

The letter states that HMRC will be cancelling VAT direct debits, where they do not hold an email address for the business in question.

The reason for this is that HMRC need to be able to notify you of the amount they intend to collect, before it is collected, in order to comply with current UK banking regulations.

After addressing what is happening and why, the letter details what you need to do in order to establish a new direct debit, and provide HMRC with a valid email address, via your Business Tax Account (BTA). Please note, your agent cannot do this on your behalf.

Setting up a new VAT direct debit

If you need to set up a new VAT direct debit, we encourage you to refer to the instructions provided in HMRC’s letter and bear in mind that timing is crucial.

New direct debits must be established at least 10 days prior to the VAT payment due date.

There are alternative means by which you can settle your VAT liabilities, in the event that direct debit arrangements are not made. You can find more detail about how to pay your VAT, on the GOV.UK website, here.

Creating a Business Tax Account (BTA)

If you have an agent acting on your behalf, it’s possible that to establish a new VAT direct debit you may need to also create your own Business Tax Account (BTA) log-in. You can do this by clicking here.

Sign in using an existing Government Gateway user ID or create new sign in details.

Once logged in, you have the option of enrolling for additional services, including VAT. You must have enrolled for VAT before you will be able to set up a new direct debit.

If you experience any problems or are unsure about any of the steps in the process, see HMRC’s guidance or contact HMRC’s online helpdesk.

How can George Hay help?

If you are unsure about what you should do next or if you have questions about fulfilling your VAT liabilities by direct debit or otherwise, seek advice. As advisers, we will always do our very best to assist you, or to point you in the right direction.

To discuss HMRC communications, VAT liabilities or any other tax and accountancy-related issues, contact us at our offices in Cambridgeshire, Hertfordshire or Bedfordshire today.

If you’re not quite ready to contact us, read more about the range of taxation services we provide and how we can support you.

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