ICAEW Warns UK Government Against Mandating Direct Debit for VAT and PAYE Due to Cash Flow Risks
💰 Government plans to mandate VAT and PAYE payments via direct debit pose risks, warns ICAEW. The plan could strip businesses of cash flow control, leading to administrative errors caused by flawed HMRC data. Issues like misallocated payments and BACS caps were noted. Adelle Greenwood of ICAEW argues against penalties for not adopting direct debits, suggesting that maintaining existing penalty regimes is better. Most taxpayers already pay on time, making the proposed mandate disproportionate.
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