VATAC7200 - Financial difficulty leading to the accumulation of VAT debt in businesses: best practice in casework

HMRC policy is that a direction to move a business to a monthly stagger may be issued when HMRC is at risk of high VAT losses due to a business’s potential of entering administration or liquidation.

Points to consider:

• This is not to be used as a ‘blanket’ approach. This should be used on a case by case basis, by the relevant team, liaising with Debt Management, looking into the circumstances of the business concerned. This must be decided to be the best method for both HMRC and the business in ensuring the prevention of large VAT losses and the protection of revenue.
• This is not a long-term solution. This would be carried out with the ideal of returning the business back to quarterly returns once the risk has reduced, for example, when an administrator/liquidator has been appointed or if the business’ financial position improves.