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Should I pay vat when direct debit not taken?

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My client's vat was due to be taken by direct debit on 11th September 2019 under MTD. It wasnt taken. So they have made the payment through bacs transfer on 12th September 2019. Today (13th September) they have had a message from HMRC saying the direct debit is set up and they will collect payment shortly. What should the client do to prevent paying twice? Or will HMRC not take the payment twice?

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By lionofludesch
13th Sep 2019 08:00

Who knows ?

It seems a bit of a shambles.

I have two clients who have sent in direct debit mandates which have been royally c0cked up by HMRC. It does seem that they won't take backdated direct debits but yours is on the cusp. If it was received in tpost today it was likely in place on the due date.

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By Cheshire
13th Sep 2019 08:01

I posted on this yesterday (in response to another MTD /slightly older post). Run down a few of the 'recent responses' and you shpuld find it.

I would look, but I'm being lazy and fed up with being bounced off my iPad!

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By Duggimon
13th Sep 2019 08:41

If the direct debit has been cancelled, they need to pay by other means. If, as seems to be the case with your client, HMRC have just ballsed it all up, the official advice from HMRC is to not pay it and wait for them to sort it out.

Unfortunately, while that appears to be the "official" advice, to get it you either have to hear it second hand from someone round here (as I did) or call HMRC, wait 45 minutes, get passed around two or three people, wait some more then find the one person there who knows what's happening and can tell you not to pay.

Otherwise unfortunately it's all guesswork and you just have to hope that once they take the second payment of the same amount, they'll realise they have two of it and give one back.

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By johnhemming
13th Sep 2019 10:32

I don't know whether HMRC will try to take the payment or not. However, the solution is to keep an eye on the bank - or even to cancel the direct debit and set it up again.

If the money is taken out you can get it reversed. Someone said it is possible with enough effort to get it reversed on the same day. It is probably only an issue for today or monday as I would not think they would take the money any later.

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Replying to johnhemming:
By Steve Howell
13th Sep 2019 10:42

Thanks John

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Replying to Steve Howell:
By johnhemming
13th Sep 2019 12:35

If you have submitted this via MTD you should learn to interpret the paymentIndicator in the electronic receipt. Some MTD software (at least one - I know) explains what it means, but I don't think the others do.

'paymentIndicator: BANK' means they will pay a refund via bacs
'paymentIndicator:DD' means they expect to take the payment via a DD.

I don't think you can entirely trust that things will happen as yet, but this is a good first step, the second step is getting the DD email and the third step is when the money goes.

The specifications are here:

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By rmillaree
13th Sep 2019 13:21

I have spoken to the vat office today and they seem to think alot of these missed direct debits will be collected next wednesday and that they will text our clients an update today to the effect. Not sure i would rely on this actually happening though. Note this would only apply where the transfer and direct debit were setup in plenty of time (29th for mtd registrations if a direct debit needed to be set up rings a bell). Any late registrations and i think a manual payment may be needed.

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Replying to rmillaree:
By Steve Howell
13th Sep 2019 13:36

Thank you for your comments. You are right. HMRC have notified the client today that the direct debit will be taken on or after 17th. So we have cancelled the direct debit on hmrc business account and client has informed the bank. So its now wait till next week to see if they still try to take the vat. The business account has not been updated for the vat already paid yesterday.

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