Making VAT payments by cheque
HMRC have issued an important reminder to businesses that continue to make VAT payments by cheque.
In April 2010 HMRC changed the way they treat receipt of VAT payments by cheque. The change means that the payment date is no longer the day on which the cheque is received but the date on which the cleared funds reach HMRC’s bank account.
A cheque typically takes three working days to clear and the cleared funds must be in HMRC’s bank account by the deadline for submission of a VAT return. Businesses that file VAT returns online must now make payments electronically.
However, smaller businesses that continue to submit paper VAT returns must ensure that cheque payments are sent in good time to clear before the VAT return due date in order to avoid late payment penalties.