Lazy firms forced to revert to paying staff cash

Thousands of UK employers may be forced to pay their staff by cash or cheque after failing to upgrade to a new system for paying direct debits and salaries.

On 1 January, the old Bacs payment system was switched off and replaced with Bacstel-IP, which is designed to cope with more transactions.
Employers have been warned for several years to migrate to the new system, but thousands failed to do so, according to processing company Voca, which maintains the Bacs network.

Most of the 102,000 UK companies using the Bacs payment system upgraded in good time, but around 5,000 firms are thought to have delayed the upgrade until December.

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The move to Bacstel-IP marks the end of a two-and-a-half year overhaul of the Bacs system.

Employers that missed the deadline have been advised to contact their ‘sponsoring’ bank.