Client cant pay VAT - but has large credit due

Can they be offset at HMRC's end?

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Client in an utter shambles has VAT of £4k due for period ending March 2017 which they cant pay. 

They also happen to have an unchashed cheque for £7k VAT rebate from over a year ago due to double paying their VAT (DD and manual - doh)

If I write to HMRC to cancel said cheque (which can't be cashed as the bank account is currently frozen - dont ask, our clients would qualify for a medal for muppetry) will they offset against the liability for March's VAT, and re-issue a net  repayment if we supply bank details?

Never had a client make this much of a mess out of VAT before, and not sure if the payments/repayments can be moved about or are 'fixed' to each period.

The are deep into penalty territory for prior non/late payments so paying this one late is not a good idea. 

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By lesley.barnes
24th Mar 2017 16:38

I'm sure they can. I've had clients move CIS refunds to pay VAT. If you ring them they might be able to cancel the cheque without you writing in and use the money to clear the debt.

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By bernard michael
25th Mar 2017 11:08

Is the client insolvent??

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