Why does it still take 3 days for payments to HMRC ?

[spencergate]

I deal with most payments online these days, and encourage clients to do the same.

Now whilst I try not to leave everything to the last minute, sadly clients aren't always so reliable or efficient.

This has lead me to wonder why, when the banks speeded up the payment clearing process last year, it still takes 3 working days for payments of PAYE/NI, or VAT to HMRC to be effective, whilst all other payments now seem to be same-day.

BTW I have had time to type this post one-handed, as I'm currently on-hold trying to get thru tho an HMRC office on the phone.

 

[KreativeJuice]

Probably so they can still issue alot of those nice little fines....

 

[gillyfleur]

I think you might find if you check who you're paying that same day transactions are only to people with bank accounts with the same bank as you ? I think it's 3 days to other banks ? maybe ? that's always been my theory anyway ! no doubt someone will tell me I'm wrong !

 

[spencergate]

I think you might find if you check who you're paying that same day transactions are only to people with bank accounts with the same bank as you ? I think it's 3 days to other banks ? maybe ? that's always been my theory anyway ! no doubt someone will tell me I'm wrong !

Not the case gillyfleur. Last year the major banks all speeded up transactions, and I know it works for sameday transactions between accounts in RBS, HSBC, Halifax & Barclays.

I'm just intrigued to know whether the continuing 3 day clearance time is the fault of whatever bank HMRC uses to clear payments (cos they know there will be a HUGE amount of money going thru, hence good interest revenue), or if it's the Govt themselves.

 

[gillyfleur]

You may well be right. I only say it because I know that some items I pay online are immediate - and others aren't. I thought I'd narrowed it down to different banks as I'd also noticed but maybe it's only government agencies or other interest making (ie greedy) institutions. I must confess I haven't exactly made an in depth study of the subject

 

[garyk]

As far as I knew it was still 3 days for payments, thats certainly the case if I move money from my business account to my personal account. I know same day BACS has been in place for some time now but not sure its fully implemented.

 

[Mattonella Tile Studio]

I'd make an educated guess that it takes a day to hit the bank, but then HMRC have to allocate it to the individual account that you have with them.

It certainly is that way with credit cards. The money goes into one huge pot that has to be allocated. However, if I pay my supplier at a different bank it's same day as it goes into their account directly.

Not the case gillyfleur. Last year the major banks all speeded up transactions, and I know it works for sameday transactions between accounts in RBS, HSBC, Halifax & Barclays.

I'm just intrigued to know whether the continuing 3 day clearance time is the fault of whatever bank HMRC uses to clear payments (cos they know there will be a HUGE amount of money going thru, hence good interest revenue), or if it's the Govt themselves.

 

[Steve2507]

Same day clearances are set up with some of the banks, for instance if we transfer HSBC to Barclays it's immediate.

It is just that some banks haven't implemented the system yet. So I would expect the HMRC is due to their clearing bank.

 

[SmartBookings]

I deal with most payments online these days, and encourage clients to do the same.

Now whilst I try not to leave everything to the last minute, sadly clients aren't always so reliable or efficient.

This has lead me to wonder why, when the banks speeded up the payment clearing process last year, it still takes 3 working days for payments of PAYE/NI, or VAT to HMRC to be effective, whilst all other payments now seem to be same-day.

BTW I have had time to type this post one-handed, as I'm currently on-hold trying to get thru tho an HMRC office on the phone.

They are public sector so expect them to catch up in 2-3 years

 

[i234i]

The staff are as slow as %$£% which is probably the reason & to add a nice little late fee to a lot of them

 

[Christiane]

I thought Faster Payments, as it's called, is capped at £250 at a time across all banks? I tried to get it increased but that's what I was told. Anything above £250 will take three days.

 

[Steve2507]

I thought Faster Payments, as it's called, is capped at £250 at a time across all banks? I tried to get it increased but that's what I was told. Anything above £250 will take three days.

Nope, we regularly transfer £1,000+ and it is instant.

 

[Christiane]

Nope, we regularly transfer £1,000+ and it is instant.

:| who are you with? I'm with A&L.

 

[Steve2507]

:| who are you with? I'm with A&L.

Barclays.

I was just about to add - it could be dependant on who your are with and also where the payment is going.

 

[vvaannmmaann]

HMRC are suffering under an avalanche of cheques coming from the House of Commons!

 

[John.Taylor]

In the many Options HMRC list for Payment under Self-Assessment, you can always do CHAPS transfer, although Barclays now charges £40 for the privilege when it's a rush job.

There is also another option called BillPay. Unlike the Post Office or Bank Giro or Telephone/Internet (BACS) entries, there is no disclaimer under this method about requiring three days for payment to be credited. It is free if you use a debit card and you get a receipt that says "Your Payment has been Accepted" with today's date and a big happy HMRC logo on the screen.

So even though they will take the money from my account in three business days, I feel like I could argue that I have paid them on time. I have a receipt that says so. The service has an upper limit on the size of your payment, but you can just make a second (or third, &tc.) payment for any additional amount if required.

 

[Page]

So no-one seems to know!

On the VAT side if you go for payment by online filing and direct debit you get an extra 7 days to complete and an extra 10 days before payment is taken compared with cheque.

Less hassle and more days =

On the credit card side from memory if you do it from the credit card side - I forget what you have to do maybe all telephone automation - you can request them to take payment and it is then immediate as opposed to sending them the payment.

Or set up a direct debit for minimum or payment in full and this takes time deadline stress off for making payments and avoids late fines again =

 

[spencergate]

So no-one seems to know!

On the VAT side if you go for payment by online filing and direct debit you get an extra 7 days to complete and an extra 10 days before payment is taken compared with cheque.

Less hassle and more days =

On the credit card side from memory if you do it from the credit card side - I forget what you have to do maybe all telephone automation - you can request them to take payment and it is then immediate as opposed to sending them the payment.

Or set up a direct debit for minimum or payment in full and this takes time deadline stress off for making payments and avoids late fines again =

Hi Page.

Having recently dealt with SA, I note that HMRC make a charge for credit card payments £1.25 if I recall.

And there is NO WAY I'm giving permission for HMRC to direct debit my accounts. Given the record they have for errors ......

 

[MyAccountantOnline]

This is why -

Information about the Faster Payment service
HMRC is currently unable to receive or make payments using the Faster Payment service, which is offered by some banks.

For a bank's customer to make a Faster Payment, both banks involved in the transaction need to be members of the Faster Fayment scheme. The Bank of England, which is currently HMRC's banking supplier, made a decision some time ago to withdraw from the provision of retail banking services to its customers (one of which is HMRC) and has not joined the Faster Payments Scheme.

HMRC is in the process of moving its business to a new banking supplier but services will not be available until about mid 2009. By that time HMRC and the bank expect to have developed the necessary changes to their systems to enable Faster Payments to be made, received and processed effectively and efficiently.

 

[los_design]

This is why -

Information about the Faster Payment service
HMRC is currently unable to receive or make payments using the Faster Payment service, which is offered by some banks.

For a bank's customer to make a Faster Payment, both banks involved in the transaction need to be members of the Faster Fayment scheme. The Bank of England, which is currently HMRC's banking supplier, made a decision some time ago to withdraw from the provision of retail banking services to its customers (one of which is HMRC) and has not joined the Faster Payments Scheme.

HMRC is in the process of moving its business to a new banking supplier but services will not be available until about mid 2009. By that time HMRC and the bank expect to have developed the necessary changes to their systems to enable Faster Payments to be made, received and processed effectively and efficiently.

And.....they missed another target

 

[Page]

Hi Page.

Having recently dealt with SA, I note that HMRC make a charge for credit card payments £1.25 if I recall.

And there is NO WAY I'm giving permission for HMRC to direct debit my accounts. Given the record they have for errors ......

I think it would be 1.25% but maybe not since cash

You tell them when you submit your return how much it is going to be that they take. After that you are covered by the DD which will cover you for all costs caused by incorrect DD.