Author: Phillips & Co Accountants, Chester
Date: 16 September, 2025
If HMRC doesn’t collect your VAT Direct Debit after you’ve filed a return, panic is understandable. In some cases HMRC has cancelled the DD (for example, when moving a business onto payments on account) and sent a letter you never received. Where a notice genuinely didn’t arrive, a carefully evidenced reasonable-excuse appeal can succeed — especially if you acted quickly once you spotted the missed collection.
Quick takeaway: Check whether HMRC has changed your payment method, pay immediately to stop interest mounting, then gather evidence if an appeal is appropriate.
Why VAT Direct Debits get missed
Common triggers include:
HMRC switching you to payments on account (high/ variable VAT liabilities)
A cancelled or expired mandate after bank or signatory changes
Branding/theme or contact changes that weren’t reflected in your HMRC setup
Letters issued to an old address (or lost in post)
What to do the moment you notice the DD hasn’t run
Pay the VAT now via Faster Payments/online banking (quote the correct reference).
Log in to your Business Tax Account and check for:
Payments on account schedule
Direct Debit status and recent messages
Reinstate or set up a fresh DD mandate if needed.
Note a clear timeline: filing date, expected collection date, when you noticed the issue, and when you paid.
Can you appeal a late payment penalty?
Possibly. HMRC will consider a reasonable excuse if you can show:
The notice never reached you (despite correct contact details), and
You paid promptly once you became aware, and
You operate sensible controls (e.g., weekly cash/check routines, post/scan logs, accurate addresses).
Evidence that helps
Mail handling policy or post/scan log
Proof other HMRC post did arrive correctly (or tracked items that didn’t)
Screenshots from your banking/HMRC account showing immediate payment
DD mandate history and any address updates
Keep the appeal factual, concise and polite. If a penalty remains, HMRC may still reduce interest/charges where appropriate.
Prevent a repeat
Calendar checks: verify DD collection the week it’s due.
Mandate hygiene: refresh the DD after any bank/signatory change.
Contact details: confirm your trading and registered addresses match HMRC records.
Internal trail: keep simple screenshots or PDFs when DDs are set up, changed or reinstated.
Payments on account: if HMRC move you onto POA, diarise the extra dates and update your cash-flow.
How Phillips & Co helps (Accountants Chester)
Rapid triage: confirm the payment status, make good any shortfall, reinstate mandates.
Penalty review & appeal: draft a reasoned letter with supporting evidence.
Controls that stick: simple checklists and reminders so VAT gets paid on time, every time.
Need a quick VAT sanity check or help with an appeal?
Call/WhatsApp today on: 01244 220 062
If you’d like expert guidance, contact Phillips & Co Accountants Chester today.
Keep More, Stress Less
Disclaimer
The information contained in this blog is for general guidance only. It does not constitute professional advice and should not be relied upon as such. Always seek tailored advice from a qualified accountant regarding your specific circumstances.