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A guide to paying VAT online in the UK

May 23, 2022

In this guide, we’ll be going through everything you need to know about paying VAT online, from the different ways to pay your VAT bill, what and when you need to pay, and what to do if you can’t pay your tax bill on time.

Paying VAT online in the UK

There’s more than one way to pay VAT, but before you settle on one payment method be sure to weigh up any alternative payment options. Be sure to take into account how long the payment takes for HMRC to process, as well as if there are any additional payment fees you’ll need to cover.Pressed for time? Worry not — we’ve covered the different ways you can pay your VAT bill, how long it takes for each payment method to process and how much you can expect to pay in processing fees in the table below:

How to pay VAT by Faster Payments

Otherwise known as online or telephone banking, Faster Payments is a near-instantaneous way to pay your VAT bill, usually reaching HMRC’s bank account on the same or next day, even on weekends and bank holidays.If you’re close to the VAT deadline, paying your VAT bill online using Faster Payments is the best way to avoid risking any late payment penalties. However, some banks do have cut-off times for same-day transactions, so be sure to check if your bank has a processing deadline to avoid missing out.This method can be used for any payment up to £250,000, and payment processing fees vary depending on your bank provider.When you’re ready to pay, simply start your VAT payment, select ‘pay by bank account’ and sign into your online or mobile bank account to approve your payment.

How to pay VAT by CHAPS

Standing for Clearing House Automated Payment System, CHAPS works like a regular bank transfer but is typically reserved for high-value payments. Having been managed by the Bank of England since 2017, there’s an extra layer of security that comes with paying your VAT bill this way.While there is no minimum or maximum payment required to use this payment method, you can typically expect to pay between £20 to £30 in processing fees.

How to pay VAT by Bacs

Bacs — otherwise known as the Bankers’ Automated Clearing System — is a bank-to-bank transfer made between banks in the UK made through either Direct Debit or Direct Credit.Bacs payments can be made any time between 7am and 10:30pm on working days, and typically takes 3 working days to process.If you choose to pay your VAT bill online using Bacs, the process will look like this:Day 1 → VAT payment is submitted to the Bacs systemDay 2 → Bank processes the VAT paymentDay 3 → Funds are transferred over to the bank and the VAT payment is settled

How to pay VAT by direct debit

Direct debit is an arrangement between you and your bank that gives a third party permission to collect an amount from your account, provided you’ve been given advance notice of payment dates and the total amount owed.To pay your VAT bill online this way, you can set up a free direct debit through HMRC. Be sure to do this at least 3 working days before you submit your online VAT return to avoid missing the payment deadline — we recommend doing this as soon as your VAT registration application has been confirmed.Once your direct debit is set up, payments will be typically taken from your account 3 working days after your VAT payment deadline, before taking a further 3 days to process. Keep in mind that if you’ve already signed up for Making Tax Digital and have previously paid VAT to HMRC through direct debit, you don’t need to set up another direct debit.

How to pay VAT by debit or corporate credit card

Paying through debit or corporate credit card can take up to 3 working days to process, but can take longer if you fill in your reference number incorrectly.If you pay using your corporate credit or corporate debit card, you’ll be charged a non-refundable fee by your bank. To get around paying any processing fees at all, you can pay your VAT bill online using your personal debit card — but you won’t be able pay with your personal credit card at all.

How to pay VAT by standing order

If you’re using the Annual Accounting Scheme or are making payments on account, you can pay your VAT bill by standing order. Standing orders take 3 working days to reach HMRC’s bank account.

How to pay VAT at your bank or building society

If you don’t want to pay your VAT online, you can go into your local bank or building society and pay your VAT bill there.You’ll need to order paying-in slips online or by phone from HMRC, which can take up to 6 weeks to arrive — so if you want to pay your VAT bill this way, you’ll need to order your slips early.With the paying in slip, you can pay your VAT bill at your bank or building society by cash or cheque. If paying by cheque, make it payable to ‘HM Revenue and Customs only.’ You’ll also need to write your 9-digit VAT registration number on the back of your check before paying in.Once submitted, allow up to 3 working days for your payment to go through.

What bank details do I need to pay VAT?

Note: you’ll also need this information close to hand if you pay your VAT bill online using CHAPS or Bacs.

When do I need to pay my UK VAT bill?

If you pay your VAT bill monthly or quarterly, you’ll have 1 calendar month and 7 days after the end of the VAT period to pay your VAT bill. However, if you use the Annual Accounting Scheme, you’ll need to make advance payments towards your bill based on your last return — or on the estimated total if you’re new to VAT — and make a final payment to settle any outstanding VAT due.

Mistakes to avoid when making a payment

Your bank’s transaction limitsYou have enough to cover the amount of VAT owedYour VAT input numberHow long it takes for your payment to go throughIf your payment has gone through — you can check this by viewing your VAT online account

What if I don’t pay my VAT bill on time?

Whether you lost track of your cash flow or had an unexpectedly large bill this time around, you might find yourself unable to pay your VAT bill.

If you find yourself in this situation, we recommend getting in touch with HMRC as soon as possible by calling the HMRC Business Payment Support Service on 0300 200 3835. From there, you can arrange a repayment plan to help you cover the cost in full without completely disrupting your cash flow.Before you get in touch, be sure to have the following information ready:

Why you can’t pay your VAT billWhat you’re doing to raise the funds to pay the amount of VAT dueHow long you expect it to take to settle your VAT payment balanceAny reference number from communications HMRC have sent to you