HM Revenue and Customs (HMRC) has announced that from 1 April 2010 all cheque payments by post for VAT will be treated as being received by them on the date upon which the cleared funds reach HMRC’s bank account.

In practice, this means that you must allow enough time for the payment to reach HMRC and to clear into HMRC’s bank account no later than the due date shown on your VAT return. If your cheque payment does not clear by the due date shown on your VAT return you may be liable to a surcharge for late payment.

A cheque takes three bank working days to clear and so excludes Saturdays, Sundays and bank holidays. Cheque payments made by bank giro are not affected by this change.

Electronic payment methods are recommended by HMRC as this is safe and secure and, in most cases, gives you up to seven extra calendar days to pay or, if you pay by Direct Debit, at least ten extra calendar days.

Those who must file their VAT returns online are required to pay electronically and so will not be affected by this change.

The VAT payment methods available are listed on the HMRC website.