Tax Glossary

CHAPS payment

White Arrow
Last updated on:
March 17, 2024

A CHAPS payment, or The Clearing House Automated Payment System, offers a method for executing same-day financial transactions within the UK. Traditionally favored for transferring substantial sums promptly, its appeal has somewhat diminished with the advent of Faster Payments and financial technology companies like Wise and Revolut, which offer more cost-effective and quicker alternatives. A notable aspect of CHAPS is its higher cost, with charges up to about £35 per transfer, and the necessity to adhere to specific cut-off times set by banks.

Paying Your Tax Bill with CHAPS

Yes, CHAPS remains a viable option for settling your tax obligations, particularly as the January deadline looms. When opting for CHAPS to clear your tax bill, ensure to include your payment reference, which is your unique 10-digit UTR number followed by the letter “K”.

The HMRC bank details required for a CHAPS transfer are as follows:

  • For HMRC Cumbernauld, use sort code 08-32-10 and account number 12001039.
  • For HMRC Shipley, the sort code is 08-32-10 with an account number of 12001020.

Your specific HMRC account for the payment can be identified on your tax bill letter from HMRC, guiding you on which account to use for your payment.

Advantages of Using CHAPS

The principal benefit of CHAPS over alternatives like Faster Payments or BACS lies in its absence of a transaction limit. This feature is particularly beneficial for substantial tax payments exceeding £10,000, which might otherwise necessitate splitting into multiple transactions and potentially incur delays. Provided you meet the bank's cut-off time for the day, CHAPS enables the entire bill amount to be sent on the same day, offering a reliable solution for urgent and large-scale financial transfers.

By clicking “Accept”, you agree to the storing of cookies on your device to enhance site navigation, analyse site usage, and assist in our marketing efforts. View our Privacy Policy for more information.

Arrange your free initial consultation today.

Book Free Consultation
UK's best rated accountant 2021
Rated Excellent
5 Stars
on Trustpilot