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Paying your Corporation Tax by cheque is illegal

HMRC dont want your cheques!

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Have receieved several letters recently as a number of clients have paid their corporation tax by cheque.

Letter states "You have paid Corporation Tax by cheque sent through the post.  You shouldn't pay Corporation Tax this way.  The law says you must pay Corporation Tax electronically"

Such little gratitude for paying taxpayers!

I can however confirm that all cheques were cashed!

 

Replies (11)

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By DMGbus
16th Nov 2016 11:45

This HMRC rule has been present for several years.

HMRC willingly accepts cheques for CT (and VAT).
Problem is that the payment date will be recorded as the date the funds clear (rather than date cheque received by HMRC).

From HMRC viewpoint (and many businesses) is that cheques are labour intensive to handle as copmpared to the modern day way of transacting electronically.

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By colinhigginson
16th Nov 2016 12:03

How come HMRC website says you can pay by cheque at the Post Office?

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Replying to colinhigginson:
By mrme89
16th Nov 2016 12:08

colinhigginson wrote:

How come HMRC website says you can pay by cheque at the Post Office?

You can, but the cheque is the cheque is made payable to 'Post Office Ltd'.

I suspect that the PO electronic payment and there is a charge for the service.

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paddle steamer
By DJKL
16th Nov 2016 12:27

Where is Albert Haddock when you need him, probably birling in his literary grave.

The catch these days of endeavouring to use a negotiable cow is that the banks no longer return cheques to the drawer and cattle prices are through the roof.

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Stewie
By Stewie Griffin
16th Nov 2016 12:28

Odd that if you overpay CT they refund by cheque

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Replying to Stewie Griffin:
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By Wanderer
16th Nov 2016 13:05

Stewie Griffin wrote:

Odd that if you overpay CT they refund by cheque


That may be about to change:-

https://www.accountingweb.co.uk/any-answers/ct-repayments-0

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By nogammonsinanundoubledgame
16th Nov 2016 18:06

I am curious to know where the law states that you must pay electronically. I am not doubting that it is there somewhere, buried in secondary legislation, but if anyone knows where ....

With kind regards

Clint Westwood

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Replying to nogammonsinanundoubledgame:
By Tim Vane
16th Nov 2016 18:30

I'm not sure whether specific legislation applies, but a cheque is not legal tender and never has been. Anybody can choose whether or not to accept a cheque as payment of a debt. If HMRC refuse to accept cheques for certain debts then that's the end of the matter. Maybe you could pay by cash through the post, but given HMRC's ability to mislay their mail, I wouldn't exactly recommend it!!

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Replying to Tim Vane:
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By nogammonsinanundoubledgame
16th Nov 2016 18:48

I don't doubt you. It was just that the wording of the HMRC letter as per the OP stated that per HMRC there was a legal bar to paying by cheque. That said, of course, if there was such a legal bar, it raises the question by what authority they then cash the cheque.

I have to say that I sympathise with HMRC's intentions here. As a taxpayer myself I don't relish MY tax payments going toward paying for unnecessary cashiers.

With kind regards

Clint Westwood

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By tazmaniandevil
17th Nov 2016 12:41

Interestingly (perhaps!) the letters state that you must pay electronically although the CT603s received this morning state that you can pay by cheque at your branch!

The CT603s state that must not pay by post - so it seems cheques are ok as long as you don't post them.

HMRC contradicting themselves? Who has ever experienced this rare phenomenon?

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Replying to tazmaniandevil:
By Ruddles
17th Nov 2016 12:51

The point that you are missing is that when you use a cheque at your bank or Post Office you are not paying HMRC. You are essentially paying the bank or the PO, who are then remitting funds - electronically - to HMRC on your behalf. The big practical difference is that it saves HMRC the hassle of having to have cheques banked and cleared.

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