Tax & Accounting News

End of the line for cheques

04/06/2010

The use of cheques could be phased out within eight years, after the Payments Council set 31 October 2018 as the target date for the closure of UK Cheque Clearing.

The decision was taken amid falling use of personal cheques, as more customers opt for electronic payment methods. However, while many shops no longer accept them as a method of payment, they are still commonly used to make payments to small businesses, and between individuals.

The Payments Council will continue to lead a programme of activity to introduce and promote alternative payment methods, and the target date will be reviewed in 2016, where the council will review progress so far, and hear representations from interested parties.

It has been predicted that the end of the cheque will save money for British business, as less costly payment systems are adopted, but small business organisations and charities working with older people have said a suitable alternative system needs to be found before cheques are phased out.

The cheque guarantee service will cease to operate from 30 June 2011, and any cheques written after that date will not be supported by the scheme.