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There are multiple options when it comes to paying your VAT bill to HMRC, including Direct Debit, an online card payment, or by bank transfer. In this article we go over how VAT-registered businesses can pay the VAT they owe to HMRC, and the payment deadline.

When do I need to pay my VAT bill by?

If you submit VAT returns on a monthly or quarterly basis, the deadline for submitting your VAT return and paying anything you owe are normally one calendar month and seven days following the end of the VAT period which the return relates to. For example, if your VAT period ends 31 March, the deadline to pay what you owe is 7th May.

It’s a bit different if your business is registered onto the VAT Annual Accounting Scheme. Despite making submissions once a year, you’ll still need to make advance payments towards your estimated bill – on either a monthly or quarterly basis.

What payment methods do HMRC accept for VAT?

HMRC accept payments towards your VAT bill:

  • Through your online bank account
  • By bank transfer
  • From a debit or corporate credit card via your VAT online account (you cannot use a personal credit card to make payments to HMRC)
  • Through your bank or building society
  • Standing orders

When you make a payment, remember to include your VAT number as a reference! This will be shown on your VAT return, and on any correspondence from HMRC about your VAT registration.

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

Failing to pay your VAT bill before the deadline will usually result in an automatic penalty, so it’s important to contact HMRC as soon as possible – even if the deadline has already passed. You may be able to make a Time to Pay arrangement and pay your VAT bill in instalments.

Other options for managing VAT

Some businesses find that using a different VAT accounting scheme can help them to manage their cash flow and pay VAT bills more easily. Choosing an appropriate scheme will depend on your business.

For example, using the VAT Cash Accounting Scheme means that you’ll only pay VAT based on the date you received payment from your customer, rather than the date on the invoice. This can help if you have clients who are regularly late paying their bills, or dealing with reclaiming VAT if they never pay at all.

Companies which are particularly at risk of non-payment might also be asked to pay a VAT security bond. This is a bit like making a deposit payment towards your expected VAT bill if HMRC feel there is evidence to suggest they won’t receive payment.

Learn more about our online accounting services for businesses. Call 020 3355 4047 to chat to the team, and get an instant online quote.

About The Author

Lee Murphy

MAAT and ICPA accountant, with a passion for making accountancy and bookkeeping accessible. Other interests include cloud-based software development for web and mobile access, keeping fit, reading, and entrepreneurship.

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