CDS Update: Government updates advice on last year’s VAT and excise overpayment

Feb 6, 2023

On the 30th December CDS Declarations had some issues where VAT charges were duplicated and this also affected excise.

HMRC has issued further guidance for businesses on how to correct the overpayments.

VAT Advice

The government’s joint Customs Consultative Commitment (JCCC) advised customers using a Duty Deferment Account (DDA) to submit a Current Month Adjustment (CMA) by the 6th Jan to ensure their overpayments were corrected the next direct debit.

Whilst the deadline has already passed, JCCC has issued the following advice for traders seeking to reclaim the over payments:

  • If you are VAT registered, you can recover overpayment through the next VAT return you submit to HMRC
  • If you are not VAT registered and pay charges in CDS through immediate payment or cash account, you should complete a C285 form using CDS
  • If you have reviewed your direct debit notification and you are concerned that the debit collected could adversely impact your business, you can contact your bank and stop the collection.
  • If you do this, email HMRC urgently with the email subject line, ‘VAT DIRECT DEBIT STOPPED’
  • The email to contact is amttradepartnerreadiness@hmrc.gov.uk
  • Include the following details:
  • Company name
  • EORI
  • Deferment account number
  • Contact details
  • HMRC will contact you after this to discuss your available options

HMRC will not charge fees or interest for any business that cancels its direct debit. However, these businesses will need to reinstate the direct debit instruction with their bank within 12 days of the cancelation to ensure payments can resume in time for the next payment period. The government will be issuing further guidance soon for intermediaries and fast parcel operators for which the above guidance does not apply.

Excise advice

The JCCC has advised that excise overpayments were also made for certain declarations made on 30 December. However, as excise duty is collected at a different time to VAT, traders using a DDA have until 19 January to submit a CMA. HMRC is asking firms to submit C285 forms for overcharged excise by 17 January.

For firms that completed a large number of declarations which were impacted by the 30 December glitch, HMRRC has said it will accept an emailed list of impacted declarations by email, rather than multiple C285s.

The following information will need to be provided:

  • MRN(s)
  • Deferment Account Number(s)
  • Amount of excise actually charged
  • Amount of excise overpaid

These companies should email this information to customsaccountingrepayments@hmrc.gov.uk.

Affected traders that paid excise duties by immediate payment or cash account can complete the C285 using CDS here.

Source: HMRC

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