This is a direct result of the transfer of VAT records to a new HMRC database called the Enterprise Tax Management Platform, which started in April 2021. This applied to VAT-registered businesses that are not signed up for Making Tax Digital for VAT.
"The letters were issued because HMRC didn't have a valid email address for the business!"
So, these traders can't be moved until July 2021 at the earliest, though to satisfy legal direct debit requirements, an email address will need to be supplied during the sign-up phase. As the transfer progresses, any direct debit not associated with an email address has to be deleted by law.
The new mandate must be set up via the individual's business tax account, which, of course, needs an email address to log in with!
VAT-registered businesses will not know exactly when their records will be transferred, and it could take up to November 2021 to complete the process. It may be worth checking each of your VAT payments have gone through on the existing direct debit and act when one isn't taken.
Deferred VAT direct debits are treated differently and are unaffected. Agents are now not able to set up direct debits for their clients, so if you are a VAT-Registered Business and have received a letter from HMRC, it's something you must action yourself.
Until next time ...
ROGER EDDOWES Business Godparent
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Roger trained at Edward Thomas Peirson & Sons in Market Harborough before working at Hartwell & Co, followed by Chancery, as a partner. He started Essendon Accounts and Tax with Helen Beaumont in 2014 as a general practitioner with a hands-on approach.
Roger loves getting his hands dirty, working with emerging, small-to-medium and family businesses to ensure they receive the best possible accountancy advice. Roger utilises an extensive network of business contacts to leverage the best guidance and practical solutions.
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