How to pay a VAT bill in the UK (and what to do if you can't)
The seven ways HMRC lets you pay VAT, the deadlines that matter, what happens if you're late, and how a VAT loan or Time to Pay works if cash is tight.
When VAT is actually due
For most UK VAT-registered businesses, VAT returns and payments are due one calendar month and seven days after the end of the VAT quarter. Payment must clear HMRC's account by the deadline, not simply be initiated. Faster Payments and card payments clear the same day; Bacs and Direct Debit take up to three working days.
Businesses on the Annual Accounting Scheme pay nine monthly instalments (or three quarterly) with a balancing payment two months after year end. Businesses on Payments on Account (turnover above £2.3m) make interim payments in months two and three of the quarter.
The seven ways to pay HMRC
1. Direct Debit, set up via the VAT online account; HMRC collects on day 10 or 12 after the deadline. 2. Faster Payments / CHAPS / Bacs from your business bank. 3. Debit or corporate credit card via GOV.UK (a 1.5% surcharge applies to corporate credit cards). 4. Online banking using HMRC's sort code, account number and your 9-digit VAT reference. 5. At a bank branch by cheque or cash with a paying-in slip. 6. Standing order (only if on Annual Accounting or Payments on Account). 7. Cheque by post (not recommended, cheque must arrive three working days before the deadline).
What happens if you pay late
Since January 2023, HMRC operates a points-based penalty regime. Each missed VAT return earns one point; hit the threshold (4 points for quarterly filers, 5 for monthly, 2 for annual) and a £200 fixed penalty applies, with further £200s for each additional missed return.
Late payment penalties are separate: 2% of the VAT unpaid at day 15, another 2% at day 30, then 4% annualised daily interest thereafter. Interest also accrues at Bank of England base rate + 2.5%.
Time to Pay vs a VAT loan
If you genuinely cannot pay, call HMRC's Time to Pay helpline before the deadline. TTP arrangements spread the debt over 3–12 months, accrue interest, and are visible on future HMRC compliance reviews and some credit reports.
A VAT loan settles the bill on time and spreads the cost over 3–12 months as a private commercial facility. HMRC sees a paid bill, not an arrears event. For directors who tender for contracts or plan to refinance, the cleaner footprint is often worth the modest interest cost.
Use a deadline-first VAT plan
Check the exact due date
Read the deadline in the business tax account and allow for the clearing time of the chosen payment method. Do not rely on a remembered quarter date.
Prioritise contact
If full payment is not possible, contact HMRC promptly. Have the liability, available payment, cash forecast and a realistic instalment proposal ready.
Prevent the next gap
Move a share of VAT-inclusive receipts into a separate reserve and update it after returns, refunds and input-tax changes.
Application checklist
- VAT registration number
- Exact liability and deadline
- Correct HMRC bank details from GOV.UK
- Payment clearing time
- Affordable amount now
- Cash forecast for any proposed plan
Useful primary and industry references
These references support further research. Product terms and official guidance can change.
Frequently asked
Can I pay VAT with a personal credit card?
No. HMRC stopped accepting personal credit cards in 2018. Corporate credit cards are accepted with a 1.5% surcharge.
How long does a Time to Pay arrangement usually last?
Most VAT TTP plans run 3 to 6 months for straightforward cases, up to 12 months in more complex circumstances.
Will a VAT loan affect my credit score?
Search and reporting practices vary. Before applying, ask whether business or personal searches will be made, whether they are soft or hard, and how an accepted facility may be reported.
