Switch to new IT system will require new direct debits to be set up

HMRC’s VAT mainframe is to be decommissioned in 2022. To do this it will move all the remaining taxpayer accounts from the mainframe to a new IT system. It intends to start moving these accounts in July 2021 and hopes to finish by September 2021. This change concerns VAT businesses that are not signed up to making tax digital (MTD) for VAT as well as a few who already are.  This will also affect taxpayers who pay by direct debit.

In line with banking regulations HMRC has to inform taxpayers paying by direct debit of the amount and date their direct debit will be taken. Due to the short timeframe between submission of the VAT return and payment of the tax HMRC says it is unable to send postal notifications and will have to use customers’ email addresses to inform them.

However it will have to cancel the...