Business: PAYE and VAT
The question
To ask the Chancellor of the Exchequer, what enforcement mechanisms are being considered for businesses that do not pay PAYE and VAT by Direct Debit; whether penalties have been modelled for non-compliance; whether exemptions have been assessed by sector, including charities; and whether an options appraisal has been undertaken.
Answered by Dan Tomlinson
The government is consulting on proposals to require payment of VAT and PAYE return liabilities by Direct Debit.
No decisions have been taken on the design of any future compliance or enforcement framework. The consultation seeks views on a range of issues, including possible incentives and sanctions to encourage compliance.
The consultation also considers whether exemptions or alternative arrangements may be required for particular taxpayers, and any practical barriers to using Direct Debit. This includes seeking evidence on circumstances where businesses may face challenges in making payments by Direct Debit and welcomes responses from all interested parties, including charities, representative bodies and other organisations, including the financial sector.
The consultation is intended to inform the detailed design of any future policy and implementation framework. As part of this process, the government is seeking evidence on operational impacts, implementation costs and potential exceptions, and stakeholders are encouraged to provide relevant information through the consultation. No final decisions have been taken, and the government will consider consultation responses before determining next steps.
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