VAT payments by cheque - important changes from 1 April 2010
From 1 April 2010 all cheque payments sent by post will be treated as being received by HM Revenue & Customs on the date when cleared funds reach their bank account – not the date when they receive the cheque.
This means that businesses must allow enough time for their payment to reach HMRC and to clear HMRC’s bank account no later than the due date shown on the VAT Return. HMRC have stated that businesses must also allow for possible postal delays i.e. as least three working days should be allowed for cheques to reach HMRC. A cheque takes three bank working days to clear – excluding Saturdays, Sundays and bank holidays.
This change does not affect any cheque payments made by Bank Giro as these are treated as electronic payments.
From 1 April 2010 businesses with an annual turnover of £100,000 or more (exclusive of VAT) and all newly registered businesses must file their VAT returns on line and pay any VAT due electronically. The change regarding cheque payments intends to make electronic methods of payment more attractive to those businesses that are not required to file their VAT returns online and pay electronically from 1 April.
If you would like to find out more about VAT on line filing or VAT electronic payments please contact Elaine Macadie on 0131 558 5800 or by email to elaine.macadie@chiene.co.uk