Small Business Accountants

Paying VAT Online - 2026 Guide

VAT-registered businesses must pay any VAT owed to HMRC by one month and seven days after each VAT period ends. Payment options include bank transfer, Direct Debit, debit card and online banking. Late payments attract a first penalty of 2% at day 15 and a second daily penalty from day 31. Setting up a Direct Debit gives you extra processing time.

By Jordan Macey MAAT Reviewed by Noor Fiaz Updated 16 Apr 2026 5

Key takeaways

VAT payments are due one month and seven days after the end of your VAT accounting period, and the payment must have cleared HMRC's account by that date.
Same-day or next-day payment methods include Faster Payments, CHAPS, online banking and debit or corporate credit card through HMRC's online portal.
Direct Debit takes three working days to process but HMRC collects automatically after you file, reducing the risk of missing your payment deadline.
You need your Government Gateway login, VAT registration number, the return period and HMRC's bank details or your card details to complete a payment.
Late VAT payments trigger a first penalty of 2% on the amount owed at day 15, rising to 4% at day 30, plus a second daily penalty at 4% per year from day 31.

Paying VAT Online

Value Added Tax (VAT) is a tax that businesses in the UK apply to most of the goods and services they sell. If a business is registered for VAT, it’s responsible for collecting this tax from customers and passing it on to HMRC. VAT plays a crucial role in the UK tax system, as it helps fund essential public services like healthcare, education, and infrastructure.

For businesses, timely payment of VAT is essential to avoid penalties and maintain accurate financial records. In the past, companies had to pay VAT manually, which was quite time-consuming. Thankfully, online payment of VAT has made the process faster and easier. Now, businesses can complete transactions in just minutes, keep their records digital, and minimise errors. Whether they’re using a business bank account, Direct Debit, or another online payment method, managing VAT payments has never been more simpler.

Who Needs to Pay VAT?

‍Businesses Registered for VAT with HMRC

If your business is registered for VAT with HMRC, you’re required to collect VAT from your customers and pay it to the government. Most goods and services sold in the UK are subject to VAT, although there are some exceptions where items are either exempt or fall outside the VAT framework.

Once you’re registered, you’ll need to file VAT returns and ensure any VAT owed is paid by the deadlines set by HMRC.

The good news is that VAT-registered businesses can reclaim the VAT they’ve paid on their business expenses, which can really help in cutting down overall costs. Just remember, it’s essential to keep accurate records of all your VAT transactions and stick to HMRC’s guidelines to steer clear of any errors or penalties.

VAT Registration Threshold

If a business's taxable turnover goes over £90,000 in a year (that's the VAT registration threshold for 2024/25), they need to register for VAT. This applies to all sales of goods and services that fall under VAT regulations. If a business thinks it will hit that limit within the next month, it should register right away.

Some businesses opt to register voluntarily, even if they haven't reached the threshold yet. This can be a smart move, as it lets them reclaim VAT on their purchases, which is especially helpful for startups or those with significant expenses.

How to Pay VAT Online

Paying VAT online is actually pretty simple, making it easy for businesses to handle their tax responsibilities quickly and safely. Just follow below steps to make your VAT payment through the HMRC online portal.

1. Log in to Your HMRC Account

To pay VAT online, you need to login to the HMRC online services portal. If you don’t have a Government Gateway account, you must create one. Once registered, you can access VAT services and make payments online.

2. VAT Payment Section

After logging in, follow these steps to find the VAT payment section:

Click on “Your VAT account.”
Select "Make a VAT payment."
Choose the VAT return period for which you are making the payment.

Check the amount due carefully. If you have already submitted your VAT return, the system will show the total VAT owed. If you haven’t submitted your return, you may need to enter the payment amount manually.

3. Choose a Way to Pay VAT

HMRC offers multiple payment options, allowing businesses to pick the most convenient method:

3.1 Pay the same or next day

by bank transfer using Faster Payments or CHAPS - check with your bank
through your online bank account
online by debit or corporate credit card

3.2 Pay in 3 working days

Direct Debit
by bank transfer using Bacs
standing order (only for businesses using the Annual Accounting Scheme or Payments on Account)
at your bank or building society

4. Pay and Wait for the Confirmation

Once you make a payment through the online service, HMRC will send you a payment reference number right away.

There's no need to reach out to HMRC to confirm that your payment has been received.

You can expect to see it reflected in your VAT online account within 3 to 5 days.

Details You Need to Pay VAT Online

To complete your VAT payment online, have the following details ready:

Government Gateway ID and password (to log in to HMRC online services)
VAT registration number (found on your VAT certificate)
VAT return period (the quarter or month for which you're paying)
Amount due (as shown on your VAT return)
HMRC bank details (if paying via bank transfer)
Business bank account details (for Direct Debit or online payments)
Debit or credit card details
Sort code, account number, and account name (for Faster Payments, CHAPS or BACS)
HMRC’s banking address
Account number (IBAN), bank identifier code (BIC), account name (If you’re paying from overseas)

VAT Payment Deadlines

Once you've submitted your VAT return, you must pay HMRC any VAT that you owe. Remember, payments are due at the same time you file your VAT return, which is one month and seven days after your VAT period wraps up. So, for instance, if your VAT quarter ends on June 30, you'll need to make that payment by August 7.

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VAT Late Payment Penalties

There are two different penalties that come into play depending on how late you pay VAT. The first penalty is 2% of the unpaid VAT if it's not settled by day 15, and then another 2% kicks in on day 30. After day 31, a second penalty starts accumulating daily at an annual rate of 4% on the amount still owed.

Frequently asked questions

When is the deadline to pay VAT to HMRC?

Your VAT payment must reach HMRC by one calendar month and seven days after the end of your VAT accounting period. For example, if your quarter ends on 31 March, payment is due by 7 May. Electronic payments such as Faster Payments or debit card must clear by that date. If you pay by Direct Debit, HMRC collects automatically three working days after the deadline shown on your return.

What payment methods does HMRC accept for VAT?

HMRC accepts bank transfer via Faster Payments or CHAPS for same-day or next-day clearance, online banking through your bank's website, and debit or corporate credit card through the HMRC portal. Slower options include Direct Debit, Bacs transfer and standing order. You can also pay at your bank or building society in person. Personal credit cards are not accepted for VAT payments.

How do I find my VAT payment reference number?

Your VAT payment reference is your nine-digit VAT registration number with two extra digits added to show the period you are paying for. You can find it in your HMRC Business Tax Account after submitting your VAT return. Always use the correct reference so HMRC allocates the payment to the right period. An incorrect reference can delay processing and may result in the payment not being matched to your account.

Can I set up a Direct Debit for VAT payments?

Yes, you can set up a Direct Debit through your HMRC online account. Once active, HMRC collects the amount shown on your VAT return automatically three working days after the due date. You must set up the Direct Debit at least three working days before your first payment is due. Direct Debit reduces the chance of missing a deadline because the collection is handled for you after each return is filed.

What happens if I pay my VAT late?

HMRC applies a two-part penalty system for late VAT payments. The first penalty charges 2% of the VAT owed if unpaid by day 15, then another 2% of the balance still outstanding at day 30. A second penalty runs daily at an annualised rate of 4% on the unpaid amount from day 31 until the debt is cleared. HMRC also charges late payment interest on the overdue balance.

What details do I need to pay VAT online?

You need your Government Gateway user ID and password, your nine-digit VAT registration number, and the VAT return period you are paying for. If paying by bank transfer, you also need HMRC's sort code, account number and your unique payment reference. For debit or corporate credit card payments, have your card details ready. Businesses paying from overseas need HMRC's IBAN and BIC codes.

How long does a VAT payment take to reach HMRC?

Faster Payments and debit card payments typically clear the same or next working day. CHAPS payments clear the same day but usually cost around £25 through your bank. Bacs transfers and Direct Debit collections take three working days to process. Allow enough lead time before the deadline so the funds reach HMRC's account on time, especially if you are using a slower method like Bacs.

Do I still need to pay VAT if my return shows a refund?

No. If your VAT return shows that you reclaimed more input VAT on purchases than you charged on sales, HMRC owes you a refund. You do not need to make a payment. HMRC usually processes refunds within 30 days of receiving your return. If HMRC needs to verify the claim, it may take longer. You can check the status of your refund in your HMRC Business Tax Account online.