The rules regarding quarterly VAT payments made by cheque have changed. From 1 April, all cheque payments made by post will be treated as being received on the date when funds reach HM Revenue & Customs’ bank account.
Fees that do not clear by the due date shown on the VAT return will be liable for a surcharge.
“Penalties are imposed on a sliding scale and increase according to the number of times payments have been late,” says Tracey Nicholls, director of agriculture at accountancy firm Peters, Elworthy and Moore.
“In some cases, these can be up to 100% of the funds owing. So we advise our clients to give at least an extra three days for fees to clear whether they’re made by cheque or electronically.”
Official guidance suggests allowing three days for cheques to reach HMRC and a further three days for funds to make it into the Treasury’s coffers.