MTD VAT Direct debit balls up

[northernladuk]

Before making any changes to VAT payments make sure you check your VAT return.

Freeagent is telling my mine is due today but if you read the VAT return it says they will debit it from the bank account on 10/5

Check thoroughly before messing with your payments.

[SimonMac]

So having switched onto MTD and previously had a DD for VAT in place I noticed that the payment for the quarter recently ended hasn't been taken.

Did a bit of googling and found this:

Vat DD payments in mtd | AccountingWEB

Sure enough the co HMRC VAT DD has been cancelled and there is no sign of another DD having been set up even though payment is overdue.

Tried to call HMRC this morning but got lovely automated message telling me they were very busy, go to the website and then ending the call with no choice to hold.

Should I just sit back and let them realise/sort out their own mess or will it come back to bite me with penalties etc?

IIRC missed one VAT submission before so have no more strikes before penalty.

You know you owe money, if it's there balls up or not, why not just make a manual payment?

[ladymuck]

My next VAT return is now due but my first MTD return is not due until August so the advice I saw on HMRC and Sage's websites was to not activate it until after this quarter's return is done.

Glad I followed the official guidance and didn't activate early as I have no patience to deal with such nonsense from HMRC.

[Lance]

I submitted my first MTD VAT return in March for the period ending in Jan as I had already set it up in FreeAgent.

DD payment was taken as usual so no problems there but have heard from others that they have had this issue.

early adopter, or bleeding edge?

[simes]

That last made me laugh.

As for MTD DD, I am on the old system for a removal of funds in May. Let's see what happens in August...

[Mutix]

Same boat here, what a mess!

Return for 02 19 period submitted beginning of March and expected to be taken out by DD mid-April.

Registered for MTD end of March, all went through and received an email from HMRC stating;

VAT Return Direct Debit: important information

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 3 April 2019 we will transfer your Direct Debit over.

On the 4th April, they indeed cancelled the old DD but apparently failed to setup a replacement one.

The payment for 02 19 return has not been taken, and VAT account shows as owing nothing (actually says payment for 02 19 was received by DD)...

[TheCyclingProgrammer]

how can this be?

The first MTD users are for VAT periods ending April 2019. The DDs for that period is not yet due.
I know this as my VAT period ended March 2019 (so no MTD for me), and the DD is not due to go till 10th May.

Or have you volountarily done your submission by MTD?

I submitted my first MTD VAT return in March for the period ending in Jan as I had already set it up in FreeAgent.

DD payment was taken as usual so no problems there but have heard from others that they have had this issue.

[Lance]

how can this be?

The first MTD users are for VAT periods ending April 2019. The DDs for that period is not yet due.
I know this as my VAT period ended March 2019 (so no MTD for me), and the DD is not due to go till 10th May.

Or have you volountarily done your submission by MTD?

[AJ1982]

Am in the same boat, money quietly sat in the bank awaiting HMRC to collect via Direct Debit. Direct Debit gone missing. VAT account says I have nothing to pay. Gonna wait until they come-a-knocking.

[MrC]

I'm unsure of is whether HMRC will automatically not issue penalties, or whether they will and the onus will be on the client/their accountant to appeal them (which can be a PITA).

Thanks Maslins, yes it's one of those conundrums where you shouldn't have to sort out their mess now but apppealing it might be worse.

More succiently:

lose vs LOSE

[Maslins]

Tried to call HMRC this morning but got lovely automated message telling me they were very busy, go to the website and then ending the call with no choice to hold.

Should I just sit back and let them realise/sort out their own mess or will it come back to bite me with penalties etc?

IIRC missed one VAT submission before so have no more strikes before penalty.

Yeah our experience on the phone line recently is similar. Does just seem to be a case of try to figure things out, and if it doesn't work, wait for HMRC to chase you.

Re your final sentence, HMRC have been fairly clear that they accept MTD is a bit iffy, and as long as you can demonstrate you've made an effort penalties shouldn't apply. If you had a DD set up, you didn't cancel it, you submitted the VAT return on time, then the error seems pretty clearly HMRC's end. One thing I'm unsure of is whether HMRC will automatically not issue penalties, or whether they will and the onus will be on the client/their accountant to appeal them (which can be a PITA).

[MrC]

So having switched onto MTD and previously had a DD for VAT in place I noticed that the payment for the quarter recently ended hasn't been taken.

Did a bit of googling and found this:

Vat DD payments in mtd | AccountingWEB

Sure enough the co HMRC VAT DD has been cancelled and there is no sign of another DD having been set up even though payment is overdue.

Tried to call HMRC this morning but got lovely automated message telling me they were very busy, go to the website and then ending the call with no choice to hold.

Should I just sit back and let them realise/sort out their own mess or will it come back to bite me with penalties etc?

IIRC missed one VAT submission before so have no more strikes before penalty.