Business News

Payment of VAT

HMRC are advising businesses that from 1 April 2010 all cheque payments by post will be treated as being received by HMRC on the date when cleared funds reach HMRC’s bank account. This change does not affect any cheque payments made by Bank Giro.

Affected businesses will need to ensure that they allow enough time for the payment to reach HMRC and clear into HMRC’s bank account. This needs to happen no later than the due date shown on their VAT return.

According to HMRC’s guidance:

“A cheque takes three bank working days to clear. Bank working days are Monday to Friday excluding bank holidays.

To allow for possible postal delays (for which HMRC is not responsible) please allow at least three working days for the cheque payment to reach them and a further three days for the payment to clear HMRC’s bank account.
If your cheque payment does not clear by the due date shown on your VAT return you may be liable to a surcharge for late payment.”

From 1 April 2010 it will be mandatory for all VAT-registered traders with a turnover of £100,000 or more, plus any newly registered traders (regardless of turnover), to submit their returns online and pay electronically. For guidance about electronic payment methods use the second link below or please do contact us.

Internet links: HMRC guidance and HMRC how to pay VAT