Some Customer!

HMRC have announced that they are changing their banking arrangements for the purposes of VAT.  The notice itself, which must have been sent to many thousands of businesses up and down the land, advises VAT registered businesses that they are changing to two new commercial banks namely Citi and Royal Bank of Scotland Group.  As a result of these changes, all payments to HMRC for VAT will need to be made to new bank sort codes and account numbers.  For many businesses who already have electronic arrangements in place, be it by BACS or CHAPS, changes need to be made immediately.

As a mere onlooker to this whole arrangement, I wonder why it was necessary to create such  upheaval.  Changes of this nature normally involve substantial, often irrecoverable costs and will have cash flow impact as expected payments aren’t processed on time because the banking change hasn’t been properly set up.  In these difficult times, when government is clearly short of funds, was it really necessary to make such a change.

As a footnote to the above, it was interesting to note that the leaflet publishing this change referred to changes occurring that “affect our VAT customers”.  The notion of organisations who have to deal with VAT as “customers” is a perverse one.  My understanding of a customer is an entity that purchases goods or services from another.  Referring to someone as  a customer and then asking them  to collect and administrate a tax on behalf of government is certainly an interesting custom.

Anyway at least HMRC are trying to treat us nicely!