Cancellation of VAT direct debits where no email address – HMRC letters
HMRC will be writing in June to businesses who currently pay their VAT by direct debit, but for whom they do not have an email address. To comply with UK banking regulations, HMRC need an email address in order to take payments by direct debit.
The letters will inform the recipient that their VAT direct debit will be cancelled between July and November, and advising them that, if they want to continue to pay by direct debit, they will need to set up a new instruction via their Business Tax Account.
Where businesses have joined the VAT deferral new payment scheme, the direct debit via which they pay off their deferred VAT is separate and will continue unaffected by this change. The letters will not be copied to agents. However, HMRC have provided us with examples of the letters which will be sent to MTD (letter A) and non-MTD businesses (letter B), copied below for reference.
Letter A – This is for taxpayers who are already registered for MTD
Important notice - your VAT direct debit
We are going to cancel your VAT direct debit between July and November 2021. This is because we do not have an email address for you. This means, if you want to continue paying by direct debit, you will need to set up a new one using your Business Tax Account (BTA).
Why we need your email address
We need an email address for you to comply with UK banking regulations. This is so we can tell you in advance, using your BTA, about the amount of VAT we will take from your bank account. The time it takes between submitting and paying your VAT Return is too short for us to tell you by post.
What you need to do
- When your current VAT period ends, log in to your BTA and select the VAT card.
- If you receive a prompt to set up a new direct debit, follow the on-screen instructions.
- If you do not receive a prompt, check again at the end of your next VAT period.
- You must setup a new direct debit at least 10 days before your next VAT payment is due.
What will happen if you do not set up a new direct debit for VAT
If you do not set up a new direct debit and give us an email address, you will have to pay your VAT using a different method. For more information about how to pay your VAT, go to www.gov.uk/pay-vat
It is your responsibility to set up a new direct debit and give us an email address. Your agent cannot do this for you. If you have an agent and have further questions about this change, please speak to them.
If you miss your VAT payment, we may charge you penalties.
If you have joined the VAT deferral new payment scheme, the direct debit via which you pay off your deferred VAT is separate and will continue unaffected by this change
For more help
To log in to your BTA go to www.gov.uk/guidance/sign-in-to-your-hmrc-business-tax-account
If you have authentication set up on your account, you will need to enter the access code sent to your mobile phone.
For guidance about using your BTA, go to www.gov.uk/government/publications/use-hmrcs-business-tax-account/use-hmrcs-business-tax-account
If you have forgotten your BTA login details, follow the links at the bottom of the sign in screen under ‘Problems signing in’ or read the guidance on our website. Go to www.gov.uk/log-in-register-hmrc-online-services/problems-signing-in
Your BTA is a secure application that only you can access to give HMRC personal or financial information. We recommend you take the time to setup and access yours now.
If you have any queries about setting up a new direct debit using your Business Tax Account (BTA), please call us on 0300 200 3700.
If your BTA has not prompted you to setup a new direct debit by the end of November, please contact us.
If you need to call us, please note we cannot take your email address over the phone. Our helpline advisers can only direct you to your Business Tax Account.
If you need extra support
We understand that COVID-19 means you may be dealing with challenges you have not experienced before, and we’re committed to supporting you during this time. For more information about the support available to businesses, go to www.gov.uk/coronavirus/business-support
If you need help to pay your VAT, you may be able get support with your tax affairs using our Time To Pay (TTP) service. For more information about this, go to www.gov.uk/difficulties-paying-hmrc
Letter B – This is for taxpayers not yet registered for MTD
Important notice – your VAT direct debit
We are going to cancel your VAT direct debit when we move your VAT record to a new IT system. This will be between July and November 2021.
This means, if you want to continue paying by direct debit, you will need to set up a new one using your Business Tax Account (BTA).
What you need to do
- When your current VAT period ends, log in to your BTA and select the VAT card.
- If you receive a prompt to set up a new direct debit, your VAT record has been moved.
- If you do not receive a prompt, check again at the end of your next VAT period.
- You must setup a new direct debit at least 10 days before your next VAT payment is due.
What will happen if you do not set up a new direct debit for VAT
If you do not set up a new direct debit and give us an email address, you will have to pay your VAT using a different method. For more information about how to pay your VAT, go to www.gov.uk/pay-vat
It is your responsibility to set up a new direct debit and give us an email address. Your agent cannot do this for you. If you have an agent and have further questions about this change, please speak to them.
If you miss a VAT payment, we may charge you penalties.
If you have joined the VAT deferral new payment scheme, the direct debit via which you pay off your deferred VAT is separate and will continue unaffected by this change.
You also do not need to take any further action if you have already signed up to Making Tax Digital (MTD).
Why we need your email address
We need an email address for you to comply with UK banking regulations. This is so we can tell you in advance, using your BTA, about the amount of VAT we will take from your bank account. The time it takes between submitting and paying your VAT Return is too short for us to tell you by post.
For more help
To log in to your BTA go to www.gov.uk/guidance/sign-in-to-your-hmrc-business-tax-account
If you have authentication set up on your account, you will need to enter the access code sent to your mobile phone.
For guidance about using your BTA, go to www.gov.uk/government/publications/use-hmrcs-business-tax-account/use-hmrcs-business-tax-account
If you have forgotten your BTA login details, follow the links at the bottom of the sign in screen under ‘Problems signing in’ or read the guidance on our website. Go to www.gov.uk/log-in-register-hmrc-online-services/problems-signing-in
Your BTA is a secure application that only you can access to give HMRC personal or financial information. We recommend you take the time to access yours or set it up now.
If you have any queries about setting up a new direct debit using your Business Tax Account (BTA), please call us on 0300 200 3700.
If your BTA has not prompted you to setup a new direct debit by the end of November, please contact us.
If you need to call us, please note that we cannot take your email address over the phone. Our helpline advisers can only direct you to your Business Tax Account.
If you need extra support
We understand that COVID-19 means you may be dealing with challenges you have not experienced before, and we’re committed to supporting you during this time. For more information about the support available to businesses, go to www.gov.uk/coronavirus/business-support
If you need help to pay your VAT, you may be able to get support with your tax affairs using our Time To Pay (TTP) service. For more information about this, go to www.gov.uk/difficulties-paying-hmrc