How to pay VAT
This guide offers a reminder of VAT payment deadlines and explains all of the available payment options.
HM Revenue & Customs (HMRC) recommends that you make all of your VAT payments electronically. Paying electronically:
- is safe and secure
- gives you better control over your money
- provides certainty about when your payment will reach HMRC
- avoids postal delays
- lets you pay at a time convenient to you if you use Internet or telephone banking
- gives you up to seven extra calendar days in which to pay
It is a condition of submitting your VAT Return online that you make payment electronically.
If the net VAT payable to HMRC on your return is less than £1, then you don’t need to pay anything to HMRC or carry the amount forward.
By 2010 it will be mandatory for all VAT-registered traders with a turnover of over £100,000, plus any newly registered traders, to submit their returns online and pay electronically.
On this page:
- VAT payment deadlines
- Paying by Direct Debit
- Paying by Internet, telephone banking or BACS Direct Credit
- Paying by CHAPS transfer
- Paying by Bank Giro
- Paying by standing order
- Paying by post
- Paying from an overseas bank account
- No payment due
- Information about the Faster Payment service
- More useful links
VAT payment deadlines
You are responsible for calculating how much VAT you owe and for paying VAT on time. Failure to do so can incur a financial penalty.
Your VAT payment is due on the same date as the due date for your VAT Return except where you use the Annual Accounting Scheme. However, if you pay electronically you have up to seven extra calendar days in which to pay. In this case you must ensure that cleared funds reach HMRC’s bank account by the seventh calendar day after your standard due date. If your payment arrives later than this you will be in default and may be liable to a surcharge for late payment.
If you submit your return online you must pay your VAT electronically. If you submit a paper return, you can pay electronically or enclose payment with your return.
Annual Accounting Scheme
If you use the Annual Accounting Scheme, you only need to submit one return per year. The Scheme allows you to spread payments throughout the year.
Read more about VAT filing and payment deadlines
Read more about missed VAT deadlines: penalties and surcharges
Read more about the Annual Accounting Scheme
Paying VAT by Direct Debit
If you choose to submit your VAT Return online you can also pay by Direct Debit. You will need to set up a Direct Debit Instruction (DDI) and HMRC will automatically collect payment from your bank account on the third bank working day after seven calendar days following your return due date. Bank working days are Monday to Friday excluding bank holidays.
If you are late submitting your return, payment will be collected on the third banking day after you submit the return.
You can't use HMRC’s VAT Online Direct Debit payment facility if you:
- make payments on account and send quarterly returns
- submit returns by post
- use the Annual Accounting scheme – although you can set up manual Direct Debit payments (see below)
Find out how to register for VAT Online and submit your VAT Return online
How to set up VAT Online Direct Debit payments
Once you’ve enrolled for the VAT Online Service, you’ll need to set up a DDI. This allows HMRC to take the VAT shown as due on your return from your bank account. You can either set up the DDI online if you’re the person who’s authorised to sign the returns or you can print out a form, complete it and post it to HMRC at the address on the form.
You can find HMRC's Direct Debit facility through the ‘submit returns’ link on the ‘my services’ home page. This takes you to the home page for online returns, where you’ll be able to set up a DDI.
It normally takes five bank working days to set up a Direct Debit. Bank working days are Monday to Friday excluding bank holidays. So, if you want to pay the VAT due on your return by Direct Debit, you must set up the DDI at least five bank working days before you submit the return online. If you haven’t allowed enough time before you submit your return you’ll have to pay by another electronic method.
Once HMRC starts to collect your payments by Direct Debit they will appear on your bank statement with the description ‘HMRC VAT’.
Only the amount shown as due to HMRC on your online return will be collected by Direct Debit. HMRC won’t collect any surcharges, interest or penalties this way.
Read the terms and conditions that apply to the Direct Debit facility
How to set up manual Direct Debit payments for Annual Accounting
At the moment VAT Online Direct Debit isn’t available to users of the Annual Accounting Scheme, but you can set up a manual Direct Debit.
If you want to pay by Direct Debit you need to indicate this on the form when you apply for the Annual Accounting scheme and include a completed Direct Debit form with your application. Your application and Direct Debit form should be sent to the address below and not the Wolverhampton address shown on the Direct Debit form.
You are expected to stay with your chosen payment method for at least 12 months. If you wish to change payment method after this period you need to notify HMRC’s Annual Accounting Registration Unit:
HM Revenue & Customs
Annual Accounting Registration Unit
National Registration Services
Imperial House
77 Victoria Street
Grimsby
DN31 1DB
Read more about the Annual Accounting Scheme
Read the terms and conditions that apply to the Direct Debit facility
Paying VAT by Internet, telephone banking or BACS Direct Credit
You can use your bank or building society services to pay by Internet, telephone banking or BACS Direct Credit (available to businesses that are authorised by their bank to submit files direct to BACS).
To make the payment you’ll need HMRC’s bank account details given below and your VAT registration number.
If you pay using any of these methods, your bank will transfer your money electronically and you may receive up to an extra seven calendar days after the standard due date for the payment to reach HMRC.
It normally takes three bank working days for payment to reach HMRC. Bank working days are Monday to Friday excluding bank holidays. Some bank and building societies can take longer. You should check with your bank or building society to see how long they take to transfer payment and what their cut-off time is for initiating payment. If they take longer then you will need to initiate your payment earlier.
HMRC’s bank account details.
| Sort code |
Account number | Account name |
|---|---|---|
| 10 00 00 | 52055000 | HMCE VAT |
If your payment is made using the wrong sort code or account number there may be a delay in updating your record or the payment may not be received at all.
Your VAT registration number
You must give your VAT registration number as the reference number. This is made up of nine digits, for example 123 4567 89. It is important that you show your registration number with no gaps between the characters otherwise there could be a delay in updating your record.
Read more about VAT filing and payment deadlines
Read more about missed VAT deadlines: penalties and surcharges
Paying VAT by CHAPS transfer
The CHAPS system enables you to tell your bank to make an immediate payment that will reach HMRC on the same day provided you initiate payment within the time specified by your bank (usually between 9.00 am and 3.00 pm).
CHAPS payments are more expensive than other payment methods but may be of benefit if you are making very large payments.
You may also receive up to an extra seven calendar days after the standard due date for your CHAPS payment to reach HMRC.
Providing HMRC bank account details
To pay your VAT by CHAPS transfer you will need HMRC’s bank account details.
HMRC’s bank account details.
| Sort code |
Account number | Account name |
|---|---|---|
| 10 00 00 | 52055000 | HMCE VAT |
If your payment is made using the wrong sort code or account number there may be a delay in updating your record or the payment may not be received at all.
Your VAT registration number
You must give your VAT registration number as the reference number. Your VAT registration number is made up of nine digits, for example 123 4567 89. It is important that you show your registration number with no gaps between the characters otherwise there could be a delay in updating your record.
Read more about VAT filing and payment
deadlines
Read more about missed VAT deadlines: penalties and surcharges
Paying VAT by Bank Giro
If your bank or building society offers the Bank Giro service you can make a VAT payment at your own bank or building society branch by cheque or cash using a Bank Giro paying-in slip. HMRC treats any payment made by Bank Giro as electronic which means you may get up to an extra seven calendar days after the standard due date for the cleared payment to reach them.
To use this payment method HMRC will need to send you a book of Bank Giro paying-in slips that are pre-printed with your VAT registration number and the HMRC bank account details.
You can order a book of paying-slips by email or over the telephone.
HMRC will need the following information from you:
- VAT registration number
- company name
Ordering by email
Use the link below to send an email order to HMRC.
Order a book of VAT paying in slips by email
electronicpaymentsteam@hmrc.gsi.go.uk
Ordering by telephone
To order by telephone please call HMRC’s payment helpline on Tel 01702 366376 or 01702 366314.
Once you have received your book of paying-in slips:
- take your paying-in slip to your own branch (other banks may refuse to accept it or may charge you for this service)
- make cheques payable to ‘HM Revenue & Customs only’ followed by your nine-digit VAT registration number
To allow for possible delays in bank processing (for which HMRC is not responsible) please allow at least three bank working days for your payment to reach them. Bank working days are Monday to Friday excluding bank holidays.
Read more about VAT filing and payment deadlines
Read more about missed VAT deadlines: penalties and surcharges
Paying VAT by standing order
You can pay your VAT by standing order if you have been accepted for the following schemes:
- Annual Accounting
- Payment on Account
Annual Accounting
If you want to pay by standing order you need to indicate this on the form when you apply for the Annual Accounting Scheme. Once your application is accepted HMRC will send you a standing order mandate that tells your bank how much and when to pay them. You will then need to fill in the rest of the form with your bank account details and send it to your bank so they can set up the standing order.
You are expected to stay with your chosen payment method for at least 12 months. If you wish to change payment method after this you need to notify the Annual Accounting Registration Unit by writing to the address below:
HM Revenue & Customs
Annual Accounting Registration Unit
National Registration Service
Imperial House
77 Victoria Street
Grimsby
DN31 1DB
Payment on Account
If you wish to make payments on account by standing order, you may use HMRC’s standing order authority form which contains the HMRC bank account details you will need. To get a copy of the form online follow the link below.
Standing order authority request form
If you want to set up a standing order via Internet or telephone banking you will need to provide HMRC’s bank account details. These are:
HMRC’s bank account details.
| Sort code |
Account number | Account name |
|---|---|---|
| 10 00 00 | 52055000 | HMCE VAT |
If your payment is made using the wrong sort code or account number there may be a delay in updating your record or the payment may not be received at all.
You’ll also need to give your VAT number as the reference number. Your VAT registration number is made up of nine digits, for example 123 4567 89. It is important that you show your registration number with no gaps between the characters otherwise there could be a delay in updating your record.
Read more about choosing the best VAT accounting scheme for your business
Read more about VAT filing and payment deadlines
Read more about missed VAT deadlines: penalties and surcharges
Paying VAT by post
HMRC recommends that you make your VAT payments electronically using one of the methods described elsewhere in this guide. Electronic payments are generally more efficient and secure, provided you give HMRC an accurate reference number.
Paper VAT Returns are being phased out, and by 2010 all VAT-registered traders with a turnover of over £100,000, plus any newly registered traders, must submit their returns online and pay electronically. You are therefore strongly advised to register to submit your returns online and pay electronically as soon as possible.
However if paying by post please:
- make your cheque payable to ‘HM Revenue & Customs only’ followed by your nine-digit VAT reference number and send it with your return using the pre-addressed envelope sent by HMRC
- do not fasten the cheque with paper clips or staples or in any other manner
If you are sending a payment to HMRC and do not have a pre-addressed HMRC envelope please send your payment to:
HM Revenue & Customs
VAT Controller
VAT Central Unit
BX5 5AT
To allow for possible postal delays (for which HMRC is not responsible) please allow at least three working days for the payment to reach them. If your payment is late you may incur a surcharge for late submission of your payment and/or your return.
Read more about VAT filing and payment deadlines
Read more about missed VAT deadlines: penalties and surcharges
Paying VAT from an overseas bank account
You can pay your VAT electronically from your bank account, even if it’s not in the UK. HMRC may give you up to an extra seven calendar days after the standard due date for electronic payments to reach them. You must still ensure your cleared payment reaches them by the seventh calendar day after your standard due date.
You will need to provide your bank or building society with HMRC’s bank account details.
Euro BACS payment method
The account name you should use is ‘VAT BACS euro’.
| Account number | International Bank Account Number (IBAN) | Sort code |
|---|---|---|
| 23031123 | GB15BKEN10000023031123 | 10 00 00 |
Euro CHAPS payment method
The account name you should use is ‘VAT CHAPS euro’.
| Account number | International Bank Account Number (IBAN) | SWIFT Bank Identifier Code (BIC) |
|---|---|---|
| 23031018 | GB37BKEN10000023031018 | BKENGB2L |
All other currencies, except euro
The account name you should use is ‘HMCE VAT’.
| International Bank Account Number (IBAN) | SWIFT Bank Identifier Code (BIC) |
|---|---|
| GB03BKEN10000052055000 | BKENGB2L |
Note: Where an IBAN is shown you must give this number as well as the SWIFT BIC.
If your payment is made using the wrong bank details there may be a delay in updating your record or the payment may not be received at all.
Your VAT registration number
You must give your VAT number as the reference number. Your VAT registration number is made up of nine digits, for example 123 4567 89. It is important that you show your registration number with no gaps between the characters. If you do leave gaps there could be a delay in updating your record.
Read more about VAT filing and payment deadlines
Read more about missed VAT deadlines: penalties and surcharges
No VAT payment due
You must let HMRC know if you have no VAT payment due by completing your VAT return showing that either a ‘nil’ payment is due, or that you are claiming a VAT repayment. The best way to do this is to send in your return online. If sending a paper return you must complete and return it by the due date shown on the top right hand side in the pre-addressed envelope provided.
If you do not send in your completed return by the due date an automatic assessment of the VAT due for that period will be sent to you.
Read more about VAT filing and payment deadlines
Read more about missed VAT deadlines: penalties and surcharges
Information about the Faster Payment service
HMRC is currently unable to receive or make payments using the Faster Payment service, which is offered by some banks.
For a bank’s customer to make a Faster Payment, both banks involved in the transaction need to be members of the Faster Fayment scheme. The Bank of England, which is currently HMRC’s banking supplier, made a decision some time ago to withdraw from the provision of retail banking services to its customers (one of which is HMRC) and has not joined the Faster Payments Scheme.
HMRC is in the process of moving its business to a new banking supplier but services will not be available until about mid 2009. By that time HMRC and the bank expect to have developed the necessary changes to their systems to enable Faster Payments to be made, received and processed effectively and efficiently.
