Legislation has been introduced to reduce the present maximum six-day clearance process, to just one day.

Banks presently send the payer’s cheque to the clearing banks to facilitate clearance. Under new rules, that will apply from October 2018, this will be reduced to one-day by sending a digital image of the cheque for clearance. To do this, banks will use a common Image Clearing System (ICS).

This should all but eliminate the present, confusing process where cheques are debited to your statement but may not be cleared to draw against for days.

Following consultation with interested parties HM Treasury have agreed that customers have the right to a copy their cheque, together with other useful information.

For those interested in the detail of their response HM Treasury said:

In 2015, HM Treasury introduced measures in the Small Business, Enterprise and Employment Act to allow UK banks and building societies to introduce the Image Clearing System (ICS) for cheques. ICS is an innovation that cuts down cheque clearing times from a possible six days to one day by sending a digital image of the cheque for clearing, rather than the paper cheque itself.

In November 2017, HM Treasury consulted on proposals to make provision for two measures in secondary legislation to support the introduction of the ICS:

• That a copy of a paid cheque (or other paper instrument), along with some additional information, be provided to the payer upon his or her request, and that the copy can be used as evidence of payment
• That if a customer paying using a cheque incurs a loss in connection with the presentment of a cheque under the ICS (that did not result from gross negligence or fraudulent activity on their part), and has not received compensation, the payee’s bank must compensate this customer for this loss. If the paying bank incurs a loss (in the event they have already paid out compensation to the customer) the payee’s bank must compensate the payer’s bank.

The aim of the proposed legislation is to ensure that the ICS, which will clear all cheques by October 2018, has no detrimental impact on the existing position of cheque users.

The Government has considered these representations and …, upon request, paying banks will have to provide a copy of the cheque together with:

• confirmation of the decision of the banker that the payment should be made (including automated decisions); the date that the decision was made (or the date upon which the automated decision was made);
• the value of the payment made;
• the sort code and account number of the paying customer (drawer of the cheque);
• any reference number allocated by the banker authorised to collect payment of the instrument (used to identify the payment instrument).

This will ensure that customers have the right to a copy of their cheque, together with useful information, while minimising the burden on industry.

Businesses that are still receiving cheque settlement of their invoices will be pleased by this announcement as it effectively reduces the credit they are obliged to give customers by up to one week.

For those of us who are reluctant to see our home address on publicly available websites such as that provided by Companies House, they will be pleased by a recent change to data suppression laws. This should help you remove your home address from publicly available company documents in certain cases.

Companies House have announced:

The law has been changed to make it easier to remove your home address from the company register. This applies to company directors and others such as secretaries, people with significant control and LLP members, whose home address is publicly available on company documents.

To remove your home address, you can apply at a cost of £55 for each document you want to suppress.

You must provide an alternative correspondence address if you are still appointed to a live company, such as a current director. This will replace your home address on the public register.

If you are no longer appointed to a company, you do not need to provide an alternative address. Instead, only the first half of your postcode will be available to the public.

You cannot use this process to remove a home address if you have used it as a company’s registered office.

If you would like to take advantage of this facility you can wade through the Companies House Guidance on their website, search for “Restricting the disclosure of your information”. Or we can discuss your options and deal with the paperwork for you.

According to government sources HMRC are asking online market places to sign an “agreement” to keep their users the right side of the law. In a recent announcement HMRC said:

“… the agreement will help online market place platforms meet their responsibility to ensure their sellers understand the tax rules, and prevent fraud taking place on their watch.”

We assume that the intention is to discourage users setting up shop and avoiding their VAT dues by avoiding registration.

An online marketplace is defined in VAT legislation as a website, or any other means by which information is made available over the internet, through which persons other than the operator can offer goods for sale (whether the operator also does so).

Since the 25 April 2018, HMRC is asking all online marketplaces operating in the UK to sign an agreement to help tackle online VAT fraud and errors taking place on their platforms.

Online marketplaces have transformed the way people shop and helped millions of businesses to sell their products and services.

As far as HMRC are concerned, the platforms have a responsibility to ensure their sellers understand the tax rules and prevent fraud from happening on their watch.

The agreement asks online marketplaces to commit to:

• educating online sellers from the UK and abroad about their VAT obligations in the UK either via their own help and support or by directing them to HMRC’s GOV.UK guidance;
• responding swiftly when notified by HMRC that sellers are not playing by the VAT rules, and setting up a system to take appropriate action; and
• finding a suitable and lawful way to provide HMRC with information about their sellers, when requested.

The last bullet point is interesting. We assume that “lawful” alludes to the data protection rules as eBay, and the like, would be required to share the personal data of their customers to comply? Will the market places be obliged to “report” their customers in some sort of de facto Money Laundering Reporting obligation?

Can’t help wondering if HMRC are shifting their workload, their eyes and ears, elsewhere?

Be interesting to see if the market place organisations will comply. Apparently, the only down side to not complying is that HMRC will not publish their name on a list of platforms that have signed the agreement.

However, about 27,550 applications to register for VAT from overseas online retail businesses have been made since HMRC started to become active in dealing with this issue. This compares with about 1,650 for 2015.