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HMRC internal manual

Debt Management and Banking Manual

From
HM Revenue & Customs
Updated
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TTP: Time To Pay requests: VAT cases

Direct Debit cases

Some customers that are registered for e-VAT pay their VAT returns by direct debit. The payment is normally collected 3 working days following 7 calendar days after the normal payment due date (which is usually one month after the end of the VAT period).

If a customer contacts you to ask for TTP you should ask them if they are registered for eVAT and make payment by direct debit. You can check to see if previous payments have been made by direct debit by looking at the PD screen on VISION. This screen has a row entitled electronic payment. If there is a 2 in this row it means that payment was made by direct debit.

If you agree to a TTP and the customer has a Direct Debit in place to pay their return then you must advise them to contact their bank/building society and ask them to withhold the payment that relates to the return in question. NDDS is a different system to the online eVAT system and setting up a DDI and TTP payment plan on NDDS will have no impact on the DDI set up online. Most banks/building societies should be able to do this with 24 hours notice but the customer must contact their bank/building society and check with them.

DD payment taken

In cases where a TTP has been agreed but the customer has still paid the return by direct debit you must honour the TTP agreement and tell the customer to contact their bank/building society and request that they refund the payment. Direct Debit payments are covered by the Direct Debit guarantee and the bank will refund the money to the customer and claim the money back from HMRC. Banking will be notified of the refund and will arrange to adjust the customer account to show that the payment has been repaid.

VAT group companies

In principle we should be including all debts for a customer when considering a TTP request. All members of a VAT group registration are jointly and severally liable for the VAT debt. If a VAT group company asks for TTP it follows that all the group members are asking for the TTP on their group VAT debt. Although the individual companies are responsible for their own direct tax debts as separate schemes, any direct tax debts (for example, PAYE) for any of the companies involved in the VAT group should be included in any TTP negotiation. It would be inappropriate on one hand to allow the group member companies to pay off the group VAT under TTP whilst at the same time allowing them to be in arrears with their PAYE and so on. Therefore, where you receive a TTP request from a VAT group and you are aware that group members have direct tax debts as well, you should include these debts in any negotiation.