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Moving to MTD for VAT cancels Direct Debit

Not a question

It seems that when you move over to MTD, HMRC will contact your bank to cancel the old DD instruction and set up a new one. Unfortunately for my client, they only managed to do the cancelling bit so the VAT hasn't been paid. HMRC still insist they wouldn't have cancelled it, despite the bank confirming the HMRC phone number on the cancellation instruction...

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20th Feb 2019 14:28

I'm surprised HMRC aren't agreeing with this as it was what I understood to be the case - that all our clients when they move over would need to set up the DD again.

This is why (apart from actually getting an ASA) I am waiting until April. Yes, I knew this was the case but what else don't we know because the information isn't flowing out of HMRC.

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By Anita14
to Kaylee100
20th Feb 2019 14:58

This from the confirmation email HMRC sent to the client: “We need to give you some information after your transfer to Making Tax Digital for VAT. There is no need for you to take any action. You currently pay your VAT return by Direct Debit. From 28 December 2018 we will transfer your Direct Debit over.”

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to Kaylee100
20th Feb 2019 15:43

Kaylee100 wrote:

all our clients when they move over would need to set up the DD again.

Why oh why oh why oh why

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20th Feb 2019 15:27

The fact is that this really is a car crash waiting to happen.
I hope HMRC have taken on enough staff to deal with the fall out from this badly thought out system. I have clients ringing me in response to this letter who havnt a clue what to do about it. With the direct debit my VAT went through on MTD without a problem and no new DD was set up .

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20th Feb 2019 16:02

Oh my!

That flys in the face of the advice I have been given and that shared yesterday on a course run by one of the large software suppliers!

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20th Feb 2019 16:39

I don't know why I'm asking, as it's HMRC so no explanation needed, but why oh why would a new direct debit mandate be needed. It's the same fricking reference whether it's on the scheme that works or MTD

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20th Feb 2019 16:52

In principle taxpayers should not have to restart the DD as it should be done automatically, but sometimes things go wrong.

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to johnhemming
20th Feb 2019 17:49

johnhemming wrote:

sometimes things go wrong.

With HMRC? No way!

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By Maslins
20th Feb 2019 20:10

Our own most recent VAT return was submitted via MTD. DD was collected as normal.

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21st Feb 2019 16:33

So - has anyone worked out the window for moving a client over to MTD with the least issues?? If you file their final Gateway return on 31/03/2019 - wait for HMRC to take payment by DD that could be 07/05 or as late as 12/05/19 say - before you can apply to move your client over to MTD. The clients bank may take 7 - 10 days to set up a new DD. Time starts to be a little crowded hahaha. OR am I wrong??

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to mfbrown185
21st Feb 2019 17:36

The window is specified on the HMRC applications to join the pilot scheme and I have put details on my website:
https://www.vat.direct/

(half way down the page). "Important points about the second pilot"

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to mfbrown185
12th Mar 2019 08:58

As I've said on another thread:-

Wanderer wrote:

Optimum time to register in your example case is in the period 11/05/2019 - 31/05/2019.

This being after the return has been made and direct debit has gone out for the March quarter under the old system but giving you time to sort out access, any further issues and, if necessary, set up a new direct debit well before the filing date for the June return under the new system.

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12th Mar 2019 08:35

Had a couple of clients join MTD and had confirmations the DD will switch, but on reflection these haven't been taken for the return submitted (despite being applying to join the pilot in line with guidance to ensure the DD will be unaffected).

Contacted HMRC about it and they're aware of the issue, some will be fine, others not. I'm assured that future returns will be collected under DD as normal, but call to ensure once return is submitted.

Their lines are going to be pretty busy, I'd suspect!

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