A peculiar set of circumstances has meant that one of the businesses I am involved in was due a VAT rebate. How wonderful, even if it is likely to be a rare event. It certainly alleviates any cash flow worries.
I have been paying my VAT electronically for many moons now and understand that everyone has to and so was checking the bank account regularly to see the money come back in. It wasn’t a huge amount but better than a poke in the eye with a sharp stick, as they say. The other day though I received a letter, via my accountant, containing a cheque from HMRC.
A check, what am I supposed to do with that? How do they work again?
Ah yes, you can photograph them and add the amount to your account on the app but the bank we are with only allows checks to be deposited this way up to a certain amount, an amount smaller than the check in my hand. It helpfully advised that I could stick it in an envelope and post it to them via their freepost address. After some consternation as to whether it would get lost, this is exactly what I did, after all it had arrived that way in the first place.
What a faff for some money I am likely to have to give them back in a couple of months anyway. If they can take it electronically what can’t they put it back that way?
The cynic in me thinks that it is to make the process more difficult in the hope that you won’t bother or that some money will get lost in the system (apparently there are hundreds of millions of pounds in uncashed tax return checks).
I am sure there is a valid reason, logical or not, though the sensible thing would be to have a VAT account associated with the business. This would be in debit every time VAT was due to be paid and could be in credit every time a rebate was due. Every quarter I could simply pay what was due, less any credit. Perhaps there is such a thing, in which case why don’t they tell me?
I would only ever need to take the cash out if closing the business and I would happily take a check then but until that time, no more checks please.
Thoughts from a Guerrilla Worker 