Tax Payments - Funds must clear HMRC's bank account by due date to avoid interest

15.07.2010

Just to remind you that all cheque payments sent by post will be treated as being received by HM Revenue & Customs (HMRC) on the date when cleared funds reach its bank account and not the date when the cheque arrives. This means that individuals and businesses must allow enough time for their payment to reach HMRC and to clear. A cheque takes three bank working days to clear, excluding Saturdays, Sundays and bank holidays.

HMRC suggests that, to allow for possible postal delays, individuals and businesses should allow at least three working days for a cheque payment to arrive and a further three days for the payment to clear its bank account.

This is very important to those taxpayers who file an income tax self-assessment tax return on paper after the 31st October deadline, who have previously relied on paying all of their tax by the following 31st January so avoiding the £100 penalty. Posting a cheque too close to the 31st January 2011 deadline could result in an unexpected penalty.

Should you have any queries regarding the above, please contact your tax manager on 0208 370 7700, option 1, who will happy to help.