HMRC Are Cancelling VAT Direct Debits

In April 2021, HMRC started moving the VAT records of traders who are not signed up to Making Tax Digital (MTD) for VAT from an old database (VAT mainframe or VMF) to a new database (Enterprise Tax Management Platform or ETMP) ...

When a VAT record is transferred and HMRC's system does not hold a valid email address, any direct debit mandate is automatically cancelled. HMRC needs to hold a valid email address for those paying by direct debit to satisfy banking requirements.

"The taxpayer will need to set up a new mandate through their business tax account or make alternative payment arrangements!"

HMRC is writing to more than 150,000 VAT-registered businesses where they do not hold a valid email address, and the transfer of records will not commence until July 2021. This communication will explain what they need to do to continue paying their VAT by direct debit.

Watch out for that brown envelope, because you don't want to get into VAT arrears.

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