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return to headline pagePaying VAT by cheque - HMRC move the goal posts
HMRC have announced that they will not be counting payments by cheque as received until the money is received as cleared funds in their account. This can take as long as six working days under the banking code. This means that from 1 April 2010 a business paying its VAT by cheque will have to make sure the cheque arrives at least six working days before the due date - that means around 10 days before the due date.
They have not yet apparently announced similar changes for the way VAT is accounted for under the Cash Accounting Scheme and the cash basis used by businesses operating the Flat Rate Scheme for small businesses.
Given that the Tribunal and Courts have already decided that payment is received on the date the cheque is received is it reasonable for HMRC to change the basis on which they will allocate payment to a business's VAT to one that is detrimental to the business and takes away about a third of the time in which it expects to be able to prepare its VAT return?