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HMRC have announced a change to the way by which they will accept VAT payments. From 1 April, the Revenue will treat all cheque sent by post as having been received on the date when cleared funds reach the department's bank account.
Taxpayers are advised to allow enough several days for their payments to reach the taxman and be cleared no later than the due date shown on their VAT returns. Cheques that do not clear by the due date may render the taxpayer liable to a surcharge for late payment.
The change does not affect cheque payments made by bank giro.
HMRC recommend that VAT payments be made electronically, which in most cases affords taxpayers up to seven extra calendar days in which to settle their debt. Paying by direct debit provides at least ten additional days. Individuals and businesses who file their VAT returns online must pay electronically.
According to independent VAT consultant Neil Warren, the new system ‘effectively means cheques need to be received by HMRC three working days before the end of the period to avoid being late. In effect, HMRC are doing everything they can to encourage taxpayers to pay by electronic means.’
