Watch the Timing of Setting Up a Direct Debit to Pay VAT
HMRC penalties make them the world’s second worst set of robbing bastards, sandwiched between solicitors and the banks.
The worst penalties of all are levied on the late payment of VAT returns.
In order to minimise your chances of being late, setting up a direct debit can be a prudent thing to do.
Customs themselves promote the direct debit facility, but they don’t make it clear that it has to be set up before you file your return. This catches out countless taxpayers who file their return and only then turn to payment options.
If they don’t make the ‘before’ bit clear, they don’t say anywhere that it must be two banking days before.
So, if you are to use the direct debit route to a sure way of never being late, you can easily fall into the trap that guarantees you will be late. Remember to leave two banking days before you submit your return.