In the UK, cheques are technically valid until they’re paid-in. There is nothing in UK law that says a cheque has an expiry date. However, most banks will only accept cheques that are less than six months old.
If you have a cheque that’s more than six months old, though that cheque’s still technically valid, don’t be surprised if your bank refuses to accept it!
It’s best for everyone if you pay in a cheque as soon as possible. But there are many reasons why you might not be able to. You might misplace the cheque, for instance. Or personal circumstances might make it impossible for you to get to a bank. And, of course, some people simply forget to pay in cheques.
What To Do With a Cheque That’s More than Six Months Old
Do you have a cheque that’s more than six months old? Are you worried your bank won’t accept it? Your best option is to contact the business or the person who gave you the cheque in the first place. Explain your situation, and ask them to write you a new cheque.
They should be able to check their bank account, which will confirm that you never cashed the original cheque. They might even be able to cancel the previous cheque they gave you. In short, there should be no reason at all as to why they wouldn’t simply write you a new cheque.
But if they do refuse to give you a new cheque, then unfortunately, the only option left for you is to take legal action. You’ll have to take the business or the individual to court, where you’ll have to prove that there’s a debt they need to settle.
But do this, and you’ll probably incur significant legal costs. And unless you have legal expenses insurance, your court case could end up costing you more than the cheque’s worth in the first place!
So treat legal action as an absolute last resort, and only consider it if the cheque’s for a significant amount that you simply cannot do without.
How Long Does it Take a Cheque to Clear?
It used to take a number of days for cheques to clear. The length of time it takes a cheque to clear may vary from bank to bank. But in most cases, if you pay in a cheque on a weekday, you should be able to access the funds by no later than 23.59 on the next weekday.
Most UK banks now use a process called cheque imaging. By taking a digital image of your cheque, banks can exchange it electronically through the check clearing system. This drastically reduces the amount of time it takes a cheque to clear. The only things that might slow the process is if the cheque bounces, or if the next weekday’s a bank holiday.
This is good news for anyone who’s cashing in a cheque, as it means they’ll be able to access the money much sooner. But if you’ve written a cheque, then be aware that the money might leave your account much sooner than you might expect. So make sure you have enough money in your account to cover any cheques you write, or they may bounce.
Avoiding Issues With Cheques
In most cases, it’s best to avoid using cheques outright. You or your customers could lose them or forget to pay them in, and even with the new cheque imaging system, there’s still a delay in the transaction of money. In the vast majority of cases, a digital bank transfer is faster, safer, and more convenient than using a cheque.
However, there are some instances where you might have no choice but to use a cheque. The most common is when working with a client, a customer, a supplier or a tradesperson who, for whatever reason, prefers to work with cheques.
So if you must work with cheques, the best thing you can do to avoid any issues is to set a routine.
Whether it’s once a week, once a month, or even every other month, put a date in your diary for a trip to the bank. That way, if you have any cheques to hand that you still haven’t cashed, you can be sure to cash them before they “expire”. If not, then you can simply ignore your appointment! This system will also help you manage post-dated cheques.
And if you ever have any problems with bounced cheques or uncooperative clients or suppliers, legal expense insurance can help you recover debts, while business interruption insurance can help you manage any problems with your cash-flow.
If you have any questions or would like to discuss your options please contact our Tapoly team at firstname.lastname@example.org, call our helpline on +44(0)2078 460 108 or try our chat on our website.