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How to Pay Your VAT Bill: A Step-by-Step Guide


December 3, 2023

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As a VAT-registered business, it’s important to know how to pay your VAT bill on time to avoid penalties and interest charges. In this step-by-step guide, we’ll walk you through the process of paying your VAT bill using various methods accepted by HMRC.

Step 1: Find out the deadline for your payment

Your VAT return will show the deadline for your payment. If you submit your VAT return monthly or quarterly, the payment deadline is usually one calendar month and seven days following the end of the VAT period that the return relates to. For example, if your VAT period ends on 31st March, the deadline to pay your VAT return is on 7th May.

Step 2: Decide on a payment method

HMRC accepts several payment methods for VAT bills, including:

  • Direct Debit
  • Online card payment
  • Bank transfer
  • Standing order
  • From a debit or corporate credit card via your VAT online account (personal credit cards cannot be used to make payments to HMRC)
  • Through your bank or building society

The most common methods are direct debit, online card payment, and bank transfer. Choose the one that’s most convenient for you.

You can find more information on paying your VAT on HMRC’s website

Step 3: Make the payment

Once you’ve decided on the payment method you want to use, complete the payment process:

Option 1: Direct Debit
If you want to pay via direct debit, set up the payment plan through HMRC’s online services. You’ll need to provide your bank details and choose the date you want the payment to be taken from your account.

Option 2: Online card payment
If you want to pay using an online card payment, you can do this by logging into your VAT online account or by using the payment page on the HMRC website. You’ll need your VAT registration number and the amount you want to pay.

Option 3: Bank transfer
If you prefer to make a bank transfer, use your online banking or visit your local bank branch. Make sure to include your VAT registration number as a reference, so HMRC can match your payment to your VAT account.

Option 4: Standing order
If you want to set up a standing order, you’ll need to do this through your bank. You’ll need to provide your VAT registration number and the frequency and amount of the payments.

Step 4: Keep a record of your payment

After making your payment, ensure that you keep a record of it for future reference, including the date of the payment, the payment method used, and the amount paid.

What happens if you can’t pay your VAT bill on time?

If, for some reason, you’re unable to pay your VAT bill before the deadline, contact HMRC as soon as possible. You may be able to arrange a payment plan and pay your VAT bill in instalments. Failing to do so may lead to automatic penalties and interest charges.

Paying your VAT bill on time is essential to avoid penalties and interest charges. Consider setting up a direct debit or standing order to make payments more manageable. If you’re unable to pay your VAT bill on time, be sure to contact HMRC as soon as possible to avoid further fees.

If you cannot pay your tax bill in full, you may be able to set up a payment plan to pay it in instalments. This is called a ‘Time to Pay’ arrangement.

We hope you find this step-by-step guide helpful in paying your VAT bill. If you need any additional support with VAT or tax-related issues, don’t hesitate to get in touch with our team.

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