Changes to Payments of VAT by Cheque

From 1 April 2010, HMRC are moving the goalposts for payments of VAT by cheque.

Historically cheque payments were deemed to be received by HMRC when they physically received the cheque from the taxpayer.  From 1 April 2010 all cheques sent to HMRC by post will not be deemed to be received until cleared funds have reached HMRC’s bank account.  From this date taxpayers paying by cheque must therefore allow more time for their payments to reach HMRC.  According to HMRC a cheque will take three bank working days to clear into their bank account
 
With the advent of online filing and compulsory electronic payments, fewer businesses will be making payment of VAT by cheque, but those who will still make payment of VAT by cheque should be aware that they will need to send their payment and VAT return at least three days earlier than previously.
 
If the payment is not received by HMRC on the due date, the taxpayer could be liable to a default surcharge.
 
If you would require further guidance on any issues in this article please feel free to contact Liam Dushynsky.