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MTD Direct Debit, manual payment for wrong return

DD for our last non-MTD return wasn't taken, was advised to manually pay, but messed up 1st MTD DD

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We signed up for MTD in March, and the direct debit for February (our last non-MTD return) subsequently wasn't taken. We contacted HMRC and was advised to make a manual payment, which we did so. However we have now noticed that the March (1st MTD return) Direct Debit hasn't been taken either.

Looking at the VAT section of our Government Gateway account it would appear that the manual payment that we made has been allotted against the March MTD return (with a refund, as the February return was a higher amount). So, the February return still hasn't been paid for, even though I have tried to pay it.

I will be contacting HMRC in the morning, but I was wondering if anyone else has had this problem, and what the outcome was?

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19th May 2019 18:23

This is why Hmrc will find people not joining up until the first lot join up in August .

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19th May 2019 19:36

The thing to do is to check the receipt from HMRC for the payment indicator. I have seen this with one of my clients who has a DD and it was missing on his receipt.

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By AW71
19th May 2019 21:25

I thought I had read somewhere not to sign up for MTD until the last non-MTD Return had been submitted AND paid. If so would this be the cause?

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to AW71
20th May 2019 07:02

In theory you need to wait for a week after the filing date (which is when the DD should be taken) before joining. If you don't pay by DD it doesn't matter.

In theory the HMRC systems will reject an application out of time.

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20th May 2019 08:19

Thanks - I'm aware that the whole situation was caused by the date we signed up to MTD, which was before the direct debit had been taken - the advice on when to sign up on the HMRC site seems to have changed a number of times, and changed since we signed up.

I'm simply trying recify the issue now.

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04th Jun 2019 12:32

The problem is not due to not waiting a certain period before signing up for MTD.

I registered a client early for MTD and filed their March return on 23/4/19, but no DD was taken on 10/5/19. The company's bank account shows that the old DD mandate was cancelled (presumably by HMRC, as the company didn't do this) and a new one set up on 9/5/19. I spent over 40 minutes on the phone with HMRC today and they admitted that this is a known problem that has affected many businesses' first DD made on a MTD return. They advise making a manual payment if the DD does not work and that it should work fine for the next return. It doesn't fill one with confidence for the roll-out of MTD. They have confirmed that they will not levy surcharges for late payment in this situation as it is the fault of HMRC.

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