Paying Your VAT Bill: A Step-by-Step Guide

by | Feb 4, 2023 | Cloud Accounting

VAT, or value-added tax, is a tax imposed on most goods and services in the UK. As a business owner, it’s important to understand how to pay your VAT bill accurately and on time to avoid penalties and interest charges. Here’s a step-by-step guide on how to pay your VAT bill in the UK, sourced from the official government website (

1: Register for VAT

If your business’s taxable turnover is over £85,000, you must register for VAT. You can register online through the government’s VAT online registration service. Once you have registered, you will receive your VAT registration number.

2: Calculate your VAT bill

Under the Making Tax Digital (MTD) initiative, businesses with a taxable turnover above the VAT threshold are required to keep their VAT records digitally and use MTD compatible software to calculate and submit VAT returns. Calculate the amount of VAT you owe by subtracting the VAT you have charged to customers from the VAT you have paid on your business expenses using a compliant MTD compatible software.

3: Choose a payment method

You can choose to pay your VAT bill online, by Direct Debit, by telephone, or by post.

4: Pay online

To pay your VAT bill online, you need to have a Government Gateway account. You can pay using a debit or credit card, or by Direct Debit.

5: Pay by Direct Debit

To pay by Direct Debit, you need to set up a Direct Debit instruction online or by post. You can choose to pay either monthly or quarterly.

6: Pay by telephone

To pay by telephone, call the VAT Payment Service on 0300 200 3700. You can pay using a debit or credit card.

7: Pay by post

To pay by post, send a cheque made payable to “HM Revenue and Customs” to the address provided on your VAT bill.

In conclusion, paying your VAT bill is a straightforward process that can be done online, by Direct Debit, by telephone, or by post. By following these steps, you can ensure that your VAT bill is paid accurately and on time, avoiding penalties and interest charges. For more information, visit the official government website (

At Carter Clear we are experienced in supporting our clients to move to MTD compliant software and submit VAT returns, if we can help with your VAT compliance please contact us

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