CDS VAT Overcharge Update (VAT & Excise)
As you are aware, a recent system update on CDS caused a VAT and Excise duty overcharge on a number of declarations. Further guidance has been released by HMRC for those traders who are still affected.
As previously communicated, the deadline for VAT Current Month Adjustment (CMA) has now passed and therefore no further amendments can be made to direct debits taken on 16th January. If customers are still affected by this issue and either did not use a DDA or did not submit a CMA they should follow the below:
- If the customer is VAT registered, the simplest way to do this is to recover any overpayment through the next VAT return submitted to HMRC.
- If the customer is not VAT registered and either paid by Immediate Payment or Cash Account, or did not submit a CMA, an Import VAT repayment can be made using the CDS form C285 found here.
- If customers have reviewed their direct debit notification and are concerned that the direct debit being collected could adversely impact their business, they can contact their bank ASAP and stop the collection of this direct debit. They should then email firstname.lastname@example.org
urgently with the title VAT DIRECT DEBIT STOPPED providing their details (company name, EORI, Deferment account number and contact details) and HMRC will get in touch to discuss alternative options available.
- HMRC will not charge any fees/interest for the stopping of the direct debit, however, once cancelled, traders will need to reinstate their DDI with their bank within 12 days of cancelling to ensure this is in place for the next payment period.
Further guidance will be issued shortly for intermediaries and parcel operators where none of the above apply.
Excise direct debit collection dates differ from those of VAT and you have until 19th January to make CMAs for excise deferment accounts.
HMRC is asking customers, who haven’t already, to submit C285s for overcharged excise by close of play 17th January.
If you have a large number of declarations impacted and producing multiple C285s is proving difficult, given the exceptional circumstances, HMRC will accept an emailed list of impacted declarations [to be sent to email@example.com], so long as the below information is provided:
- Deferment Account Number(s)
- Amount of excise actually charged
- Amount of excise overpaid.
For those traders who had excise overcharged and either paid by Immediate Payment or Cash Account, an excise repayment can be made using the CDS form C285 found here.