Firms urged to reinstate VAT direct debits
Businesses that chose to defer VAT payments during the COVID-19 crisis should set up new direct debit mandates to pay their next VAT bill on time, or risk being fined.
VAT-registered firms in the UK were offered the chance to defer VAT payments due between 20 March and 30 June 2020 due to COVID-19.
Those businesses that took up the option to defer their VAT payment as a result of coronavirus must pay the VAT due on or before 31 March 2021.
HMRC advised customers who normally pay by direct debit to cancel the arrangement with their bank.
But the Revenue is now urging firms to reinstate cancelled direct debit mandates at least three working days before submitting their VAT return.
From 1 July 2020, VAT returns need to be submitted as normal, and on time, with the VAT paid in full.
The Association of Taxation Technicians (ATT) said firms with a VAT quarter ending 31 May need to move quickly to make the 7 July 2020 deadline.
Michael Steed, co-chair of ATT's technical steering group, said:
"If a business has previously cancelled their direct debit mandate in order to defer a VAT payment, they need to set up a new one in plenty of time to ensure that their next, non-deferred, VAT payment can be taken in time.
"Failure to get a direct debit set up in time could result in the business paying their VAT bill late, and result in them being charged a penalty."
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