Payments on Non Banking days

Everything from business credit card payments to PAYE and VAT due days can fall on weekends or bank holidays. In cases where remittances are not carried out on the preceding business day the payment will effectively be made late.

For example PAYE payments to HMRC are due on the 19th of every month. In November 2011 the 19th falls on a Saturday. If this fact were to go unnoticed and calendar reminder began flashing on the following Monday 21st the business would be defaulting on its statutory obligation to remit the monies on time.

Direct Debits and standard orders are a good mechanism for avoid missed payments but even with these in place the business still has to ensure that sufficient funds exist in their current bank accounts for the amounts to be paid.

Typically businesses will not carry large balances on their current account in order to minimise any losses should their facility be compromised. In the case of large VAT, PAYE or credit card balances a special transfer to a business bank account is often necessary to cover these demands.

HMRC sometimes give businesses two occasions in which payments can be late before imposing penalties and or interest. For a business with the required funds and knowledge and willingness to satisfy the obligation, such measures of enforcement can be inconvenient and seem wasteful.

Ensuring that adequate reminders of both the impending due payments and the time action is required so that they can be paid on time (taking in to account non banking days) is therefore important to all businesses.