VAT update: refunds available for VAT payments

Published: Tuesday 9 June 2020

As a further update to the temporary arrangements for the deferral of VAT payments, HMRC has confirmed that where taxpayers wanted to defer VAT payments due between 20 March 2020 and 30 June 2020, but did not manage to cancel their direct debit in time they can claim a refund.

The quickest way for taxpayers to do so, according to HMRC, is to submit a direct debit indemnity claim to their bank, ensuring that they state they want to claim a refund under the direct debit indemnity scheme (DDI). HMRC confirms that there is no time limit in making 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. As HMRC is not currently issuing payable orders, it may take up to 21 days for the refund to be received if the direct debit indemnity claim process is not used.

Businesses will still need to make arrangements to pay VAT falling due from 1 July 2020 to 31 March 2021 (i.e. amounts that are not deferred). There is some concern that reinstating a direct debit could result in the deferred VAT being collected immediately due to a change in the way that HMRC collects direct debits for those in MTD – it is understood that HMRC are looking at ways to ensure that this does not happen.

For more information on the VAT refunds available or if you have further queries as to how this affects your business, please get in touch with Julian Millinchamp at or 01242 680000.

To read more about the direct debit guarantee, click here