HMRC have announced a shorter deadline for VAT payments by cheque, applicable from 1/4/2010.

HMRC have announced that from 1 April 2010 all cheque payments made by post will be treated as being received by HMRC on the date when cleared funds reach HMRC’s bank account.

This means taxpayers need to allow enough time for the payment to physically reach HMRC and clear into HMRC’s bank account no later than the due date on your VAT Return. Cheques will take three bank working days to clear and taxpayers should allow time for any postal delays.

If your cheque payment does not clear by the due date on your VAT return, you may be liable to a surcharge for late payment.

This change in approach significantly reduces the time taxpayers have to calculate their VAT return liability.  This appears to be a further push by HMRC towards electronic payments, which in most cases, gives up to seven extra calendar days to pay, or if you pay by Direct Debit, ten calendar days (see February VAT Insight) for details of the exceptions to these extensions.

 If you require any assistance in registering for online VAT return filing and payment, please call your normal Henderson Loggie contact or Alan Davis or Kathryn Williamson in our VAT team.
 

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