Making VAT payments by cheque
Businesses that make VAT payments by cheque need to be aware of some important changes which are taking place from 1 April 2010.
From this date, HMRC will treat receipt of payments by cheque not as the day on which the cheque is received, as is currently the case, but as 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 also make payments electronically. As our readers will be aware most businesses will be required to make online filings from 1 April 2010.
However, smaller businesses that continue to submit paper VAT returns must ensure that cheque payments are sent in good time so that payment clears by the VAT return submission deadline in order to avoid late payment penalties.