Bank Transactions

Effective Date

SIPP Contributions

For a contribution to a SIPP, the 'date' is the date the contribution is processed by the administrator, not the date that the cheque is cleared by the bank. This is especially significant for claiming tax relief and contributions 'received' on 31st January and 5th April.

Pension Withdrawals

Similar principles apply for pension withdrawals - the 'date' is the date of processing by the administrator, not the date that the member happens to get round to cashing a cheque. This is important for determining whether the actual pension exceeded the maximum allowable in any year.

Forward Dates

The 'date' may be different from the date the event is processed by the administrator in some situations e.g. instructions could be given to the bank on 5th March to make BACS transactions on 9th March - in that case we would enter the transaction as 9th March (and the software allows this transaction to be entered on 5th March with the forward date). Care should be taken with running valuations e.g. a valuation run with an effective date of 6^th March (perhaps run on 6^th March itself) will exclude the forward transaction stored for 9^th March.

Bank Reconciliations

In general terms, the date recorded in accountancy software will be the date a cheque is received or is written by the accounts department, not the date that the cheque is cleared. When reconciling the bank account at the end of the month, allowance would be made for cheques not cashed. The transactions that have passed through the bank account would be posted (by cross reference with the bank statement when it arrives) and the remaining unposted records should help identify the transactions that have not cleared the bank account.