The short version: CHAPS (Clearing House Automated Payment System) is a same day payment method used in the UK. It’s often used for large or time sensitive transfers.
When would you use it?
CHAPS is useful when you need to send a large amount quickly and can’t wait for standard bank transfers. There’s no upper limit on how much you can send, which makes it handy for big tax bills or property transactions.
The downside? Banks typically charge a fee for CHAPS transfers and there are strict cut off times during the day.
Can I pay my tax bill with CHAPS?
Yes. If you’re up against a deadline and need the payment to arrive the same day, CHAPS works. You’ll need your 10 digit UTR number followed by the letter K as your payment reference. Your tax bill letter from HMRC will have the bank details to pay to.
For most people, Faster Payments or online banking is cheaper and just as quick. But if your tax bill is over your bank’s Faster Payments limit, CHAPS lets you send the whole amount in one go.
Need help figuring out the best way to pay HMRC? Give us a shout and we’ll help you work it out.
