If you’re running a business in the UK, sooner or later you’ll face the question: how do I pay my VAT bill? Well, you can pay online through your HMRC account, set up a Direct Debit, use online banking, or even pay by corporate credit card.
The important thing is making sure HMRC receives the money by the deadline shown on your VAT return. Missing it can mean penalties and interest.
In this article, you’ll get to know everything about paying your VAT bill, including:
- How do I pay my VAT bill?
- What happens if I pay my VAT bill late?
- How long do I have to pay my VAT bill?
- And much more…
Let’s get into it!
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How Do I Work Out My VAT Bill?
Before paying your VAT bill, it’s important to calculate how much VAT you owe. You can do this by submitting your VAT return. This return will show the VAT you’ve collected from sales (output tax) and the VAT you’ve paid on purchases (input tax).
If your output tax is higher than your input tax, you’ll owe the difference to HMRC. If it’s the other way around, you may be due a VAT refund.
How to Submit Your VAT Return
- Online Filing: Most businesses are required to file their VAT return online through HMRC’s Making Tax Digital (MTD) system.
- Submission Deadline: VAT returns are generally due quarterly. Some businesses may be set up for monthly or annual returns depending on their specific requirements and turnover.
Make sure you file your VAT return on time to avoid penalties.
How Do I Pay My VAT Bill to HMRC?
There are several ways to pay your VAT bill, depending on what suits your business best.
Choose a method based on how quickly you need the payment to clear:
- Direct Debit: This is the most efficient way to ensure you never miss a deadline. Once set up through your HMRC online account, payments are automatically collected 3 working days after the payment due date.
- Online Banking (Faster Payments): Usually processed on the same or next day, including weekends and bank holidays. You can approve the payment directly through your banking app or website using the “pay by bank account” option in your HMRC portal.
- Debit or Corporate Credit Card: Payments made via HMRC’s online service are accepted on the date you make them. Note that personal credit cards are not accepted, and both corporate credit and debit cards incur a non-refundable fee.
- CHAPS: Guaranteed same-day payment if instructions are sent to your bank by 2 pm on a working day. This is typically used for high-value transfers and often carries a bank fee of £20–£30.
- Bacs: A manual bank transfer that typically takes 3 working days to clear.
How Do I Pay My VAT Bill Online?
The most common way to settle your VAT bill with HMRC is through your online tax account. Once you log in, you will see an option to make a payment. From there, you can choose to pay by bank account, which links directly to your banking app to approve the transaction. This is often called a “Faster Payment” and it usually clears on the same day.
If you don’t want to log into your bank through the portal, you can pay using a debit card. Keep in mind that HMRC does not accept personal credit cards anymore. If you use a corporate credit card, be prepared to pay a small non-refundable fee.
Can I Pay by Direct Debit?
Yes, and this is actually the method HMRC prefers. When you set up a Direct Debit, you are giving them permission to take the exact amount shown on your VAT return.
- You must set it up at least three working days before you submit your VAT return.
- The money is usually taken 3 working days after the payment deadline shown on your VAT return.
- Once it is set up, you don’t have to worry about missing a payment date ever again.
How Long Do I Have to Pay My VAT Bill?
Generally, your VAT bill is due one month and seven days after the end of your VAT period. For example, if your VAT quarter ends on 31 March, your VAT payment would be due by 7th May. You’ll find the exact due date on your VAT return.
What is the Deadline to Pay My VAT Bill in 2026?
For most businesses, the deadline for both filing the return and making the payment is one calendar month and seven days after the end of your VAT period. For example, if your VAT quarter ends on 31 March, your deadline to pay will be 7 May. You need to allow enough time for the money to reach HMRC.
What Happens If I Pay My VAT Bill Late?
The penalty system remains strict in 2026. If you miss your deadline, two things happen: late payment interest and late payment penalties.
| Days Overdue | Penalty Rate | Notes |
| Up to 15 days | No penalty | Interest still accrues daily from day 1. |
| 16 to 30 days | 3% of the tax outstanding at day 15 | A first penalty is charged if the tax is still unpaid at the end of day 15. |
| 31+ days | Additional 3% of the tax outstanding at day 30, plus a daily penalty of 10% per annum, and late payment interest (Bank of England base rate + 4%) from the original due date. | A second, ongoing penalty begins to accrue daily from day 31 until the balance is paid in full. |
How Late Can I Pay My VAT Bill?
You can technically pay your VAT bill any time before HMRC takes further action, but if you are more than 15 days late, you could incur a penalty. The longer the delay, the higher the penalty, and eventually, you might face legal actions from HMRC.
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How Often Do I Pay My VAT Bill?
The standard is every three months (quarterly). However, depending on your business size and how you prefer to manage your cash flow, there are a couple of other options:
- Monthly Returns: Good for businesses that regularly get VAT repayments back from HMRC.
- Annual Accounting: You pay in instalments throughout the year and then do one final “balancing” payment and one return at the end.
Can I Pay My VAT Bill Over The Phone?
This is a common point of confusion. You cannot call HMRC and pay your bill over the phone. If you ring their helpline, the advisor cannot take your card details or process a payment for you.
However, you can use your own bank’s telephone banking service to send a manual Bacs or Faster Payment to HMRC using the bank details listed above. So, while you can use a phone to make the transfer happen through your bank, you can never pay HMRC directly during a phone call.
You can also pay online, via Direct Debit, or at your bank, but the phone call to HMRC is for questions, not payments.
Can I Pay My VAT Bill With A Credit Card?
You can only use a corporate or business credit card to pay your VAT bill online. Personal credit cards are not accepted by HMRC for VAT payments. Just be mindful that there is usually a small, non-refundable fee for using a corporate card.
Can I Pay My VAT Bill in Instalments?
Yes, you can pay your VAT bill in instalments by setting up a Time to Pay (TTP) arrangement with HMRC. These plans typically allow you to spread the cost over 6 to 12 months through monthly direct debit payments.
To apply for this arrangement, you’ll need to contact HMRC and provide details of your situation. It is recommended to contact HMRC as early as possible to avoid the possibility of penalty charges for late payment.
What Happens If I Can’t Pay My VAT Bill On Time?
If you believe you will encounter difficulties in making your VAT payments by the due date, do not ignore the deadline. The most important thing you can do is submit your VAT return on time, even if you are not able to make a VAT payment. This avoids getting penalty points for late filing, which can lead to separate £200 fines.
You should contact HMRC’s Business Payment Support Service as early as possible. You may be able to obtain a Time to Pay (TTP) agreement, which we mentioned earlier. TTP agreements enable you to repay amounts owed to HMRC in instalments, usually up to 12 months. If you agree on a plan within the first 15 days of being late, you can often avoid late payment penalties entirely, although you will still have to pay interest.
Why Is My VAT Bill So High?
A high VAT bill often indicates your business is growing, but it can also be due to high profit margins. If you have very few business expenses compared to your sales, your reclaimable VAT will be low. Also, ensure you are not accidentally charging 20% on items that should be zero-rated or reduced-rated.
How Do I Reduce My VAT Bill?
While you can’t reduce the tax itself, you can make sure you aren’t overpaying. Here are a few ways to keep the bill as low as possible:
- Choose the right scheme: Some businesses find the Cash Accounting Scheme helpful for cash flow because you only account for VAT when money actually changes hands, rather than on the invoice date.
- Claim all eligible expenses: Ensure you are reclaiming VAT on every business cost, from software subscriptions to equipment.
- Bad debt relief: If you have not received payment from a customer in excess of six months, it may be possible to claim back some of the VAT you have previously paid to HMRC on that sale.
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The Bottom Line
Staying on top of your VAT is all about two things: good records and timing. If you use a Direct Debit and keep your digital accounts up to date, paying your bill becomes a five-minute task rather than a weekend of stress.
The most important thing to remember is that if you ever can’t pay, talk to HMRC or an expert as soon as possible to keep the penalties at bay.
How Accotax Can Help
If you need help with your VAT or any other accounting services, visit Accotax. We offer a range of packages designed to fit your unique needs!
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Disclaimer: All the information provided in this article on “How Do I Pay My VAT Bill?” including all the texts and graphics, is general in nature. It does not intend to disregard any of the professional advice.