The VAT payment deferral which gave UK VAT-registered businesses the option to defer VAT payments due between 20 March and 30 June 2020 until 31 March 2021 comes to an end at the end of June. With this in mind businesses need to reinstate their direct debit mandates so that they are in place ready for payments due in July 2020 onwards.
Agents cannot set up direct debit mandates on behalf of clients; the business needs to set up the mandate through their business tax account.
HMRC has confirmed that it will not collect the outstanding balance of deferred VAT when the direct debit mandate is reinstated.
Arrangements will also need to be made to pay the deferred VAT by 31 March 2021; further guidance is due from HMRC.