Taxpayers who missed VAT deferral might be able to claim refund

HMRC have confirmed that taxpayers who wanted to defer VAT payments due between 20 March 2020 and 30 June 2020, but failed to cancel their Direct Debit in time can claim a refund.

The quickest way for taxpayers to do this, according to HMRC, is to submit a Direct Debit Indemnity Claim to their bank, stating they want to claim a refund under the Direct Debit Indemnity Scheme (DDI). HMRC has said that there is no time limit to make this request.

If the taxpayer wants a repayment from HMRC rather than contacting the bank, they must ensure that their bank details are updated using the online services.

Due to COVID-19 restrictions, HMRC are not issuing Payable Orders are not being issued and so it may take up to 21 days for the refund to be received if the DDI Claim process is not used.

HMRC are expected to provide further guidance on the payment of the deferred amount at the end of the deferral period.

Businesses will need to make arrangements to pay VAT which falls due from 1 July 2020 to 31 March 2021 (ie, amounts that are not deferred). The ICAEW Tax Faculty is awaiting confirmation that reinstating a Direct Debit will not result in the deferred VAT being collected immediately. A change in the way that HMRC collects Direct Debits for those in Making Tax Digital (MTD) for VAT makes this a possibility and HMRC will needs to ensure that does not happen.


This article is for general guidance only. It provides an outline, and may not include points which are important to your situation. You should not depend on this blog without taking advice based on the full facts of your case. The information given was correct at the time of publication.

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