Cancellation of VAT Direct Debits

Between July and September 2021 HM Revenue & Customs will move all remaining VAT accounts over to their new Enterprise Tax Management Platform (ETMP), with the plan to decommission the VAT mainframe in 2022. Customer Direct debits will be cancelled before being moved to the new system.
This change affects VAT registered businesses which are not yet signed up to Making Tax Digital (MTD) for VAT. However, a small number of MTD registered customers may also be affected by this change.

HMRC will notify affected VAT registered businesses by a letter which will prompt them to access their Business Tax Account and reinstate the VAT Direct Debit as well as providing a contact email address.

UK banking regulations require HMRC to inform customers of the amount and payment date for each Direct Debit. Due to the short timescale between submission of the VAT return and collection of the Direct Debit, this can only be done by email so the business should ensure that a contact email address is provided.

Where the VAT Direct Debit is not reinstated, the VAT registered business will have to pay their VAT liability by a different method.

Affected businesses should continue to file their VAT returns through their Business Taxes Account as normal.

The HMRC release can be found here.


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