Reinstating your VAT Direct Debit payments

The VAT payment deferral means that all UK VAT-registered businesses have the option to defer VAT payments due between 20 March and 30 June 2020.

If you choose to defer, you will be given until 31 March 2021 to pay any liabilities that have accumulated during this time.

However, with the deferral period coming to an end, if you are VAT-registered and deferred your VAT payments during this period, you may now need to take steps to reinstate your direct debit mandates so that they are in place in time for payments due from July 2020 onwards. Any outstanding returns should be filed and three working days should be allowed to elapse before reinstating the direct debit mandate.

HMRC will issue guidance on the end of the VAT deferral period very soon but, to be effective, direct debit mandates usually need to be set up three working days before a VAT return is filed.

We cannot set up direct debit mandates on behalf of our clients, so please don't forget to set this up through your business tax account.

HMRC has confirmed that it will not collect the outstanding balance of deferred VAT when the direct debit mandate is reinstated as they have made the necessary systems change to avoid this happening for businesses in MTD for VAT.

If you have any queries, please do not hesitate to get in touch with us on 0121 693 5000 (Solihull Office) or 01527 833124 (Bromsgrove Office).