The current VAT mainframe computer will be decommissioned next year. HMRC is preparing for this by moving businesses to a new IT system over the next few months. Why might this mean problems with payments?
HMRC intends to start moving taxpayer accounts to a new IT system in July 2021 and hopes to finish by September 2021. This change will affect:
- VAT-registered businesses that are not signed up to Making Tax Digital, i.e. mainly voluntary registrations; and
- businesses that pay their VAT bills by direct debit.
To comply with banking regulations, HMRC has to inform businesses that pay by direct debit of the amount and payment date before the payment is taken. Due to the short timeframe between the return due date and the payment date, HMRC says it will only be able to do this by email following the change. If a business has no email on record, the direct debit will be cancelled, meaning the business is at risk of paying late. It is therefore worth logging into the business tax account now to ensure there is an email address on record.
What to do next.
For further information on this and other topics contact Tony on 07974-418819 or email at firstname.lastname@example.org or through the contact page of the website http://www.milestone-solutions.co.uk