Blogs | 17 January 2023

Update from HMRC: CDS declarations VAT issue

Latest news, C4T

Please find below the latest update from HMRC regarding the issue of duplicate VAT charges that occurred in the last week of December 2022;

VAT

 You’ll be aware that on 30 December a system update caused Customs Declaration Service (CDS) to overcharge VAT on certain declarations. The issue was quickly resolved, and we contacted customers who use Duty Deferment Accounts (DDA) to recommend submitting a Current Month Adjustment (CMA) as the quickest route to correcting any overpayments.

As previously communicated, the deadline for VAT CMA’s 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 amttradepartnerreadiness@hmrc.gov.uk urgently with the title VAT DIRECT DEBIT STOPPED providing their details (company name, EORI, Deferment account number and contact details) and we 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 scenarios applies.

Excise

This system update also caused CDS to overcharge Excise duty for certain declarations on 30 December. Excise direct debit collection dates differ from those of VAT and we have until 19th January to make CMA’s for excise deferment accounts. We are asking customers, who haven’t already, to submit C285’s for overcharged excise by the close of play 17th January. If you have a large number of declarations impacted and producing multiple C285’s is proving difficult, given the exceptional circumstances, we will accept an emailed list of impacted declarations [to be sent to customsaccountingrepayments@hmrc.gov.uk] so long as the below information is provided:-

  • MRN(s)
  • 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.

If you have further questions concerning the amendment or refund of the duplicate VAT charges, please contact UK Customs authorities directly.

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