How to pay your VAT bill: deadline, payment methods and HMRC's bank details

Your company must pay its VAT bill within one calendar month and seven days of the VAT period ending. Pay online with HMRC's Pay now service, or by transfer to HMRC VAT (sort code 08 32 00, account 11963155) with your nine-digit VAT number as the reference. Here's how long each method takes, and what if you can't pay.

What paying late costs: a £20,000 VAT bill paid 30 days late costs about £727 in interest and penalty. Pay within 15 days, or agree Time to Pay with HMRC by then, and there's no penalty (our worked example, using HMRC's rules, checked 12 October 2026).

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When is my VAT bill due?

Your payment must reach HMRC by the same deadline as your VAT Return, which is usually one calendar month and seven days after the end of your VAT period. Your VAT online account shows the exact date for your company.

The deadline is when the money must arrive, not when you send it. It still applies on a weekend or bank holiday, so if your deadline lands on one, make sure the payment clears by the last working day before, unless you pay by Faster Payments (gov.uk). You send the return itself through Making Tax Digital software: here's how to submit your VAT Return.

Three set-ups change the timing:

• Direct Debit. Set it up at least three working days before you submit your return. HMRC then collects the payment three working days after the deadline. You can't use it for payments over £20 million (gov.uk).
• Annual Accounting Scheme. You make advance payments of 10% of your estimated bill each month, or 25% each quarter, then a final payment within two months of the year end. Companies with taxable turnover of £1.35 million or less can join (gov.uk).
• Payments on Account. If your company owes more than £2.3 million in VAT a year, HMRC asks for payments on the last working day of the second and third months of each quarter. The seven-day extension doesn't apply (gov.uk).

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How to pay VAT to HMRC

Most companies pay online through HMRC's Pay now service, either by approving a payment in their online banking or by card. You can also send a bank transfer straight to HMRC's VAT account.

1. Find your nine-digit VAT registration number in your VAT online account or on your VAT registration certificate.
2. Check the amount and the deadline in your VAT online account.
3. Choose a payment method that will reach HMRC in time (see the table below).
4. Use your VAT registration number, with no spaces, as the payment reference.
5. Keep a record, and check your VAT online account to confirm HMRC has the payment.

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HMRC's bank details for VAT

Pay HMRC VAT, sort code 08 32 00, account number 11963155, with your nine-digit VAT registration number (no spaces) as the reference. Faster Payments, CHAPS and Bacs all go to this account.

If you're paying a VAT penalty, use the 14-character reference starting with X from HMRC's letter instead. The wrong reference can delay your payment or put it against a different tax bill (gov.uk). If your return shows HMRC owes you money, see how to reclaim VAT.

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How long each payment method takes

Faster Payments and online bank approvals reach HMRC fastest, while Bacs and standing orders take three working days. Direct Debit is collected three working days after the deadline, so it's safe as long as you set it up early.

All timings are from gov.uk, checked 12 October 2026.

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What happens if you pay VAT late

HMRC charges late payment interest from the first day at Bank Rate plus 4%, which is 7.75% a year since 9 January 2026. If the VAT is still unpaid after 15 days, it adds penalties too (gov.uk, checked 12 October 2026, with Bank Rate at 3.75%).

The penalties build in stages. Up to 15 days late, there's no penalty. From day 16, HMRC charges 3% of what was unpaid at day 15. From day 31, it adds another 3% of what's still unpaid at day 30, plus a second penalty at 10% a year, charged daily until you pay. For the full rules, including late returns, see HMRC's late-payment penalties.

Here's what that means for a £20,000 VAT bill:

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If you don't pay at all

If your company doesn't pay or agree a plan, HMRC can use a debt collection agency, take money from the company's bank account, take and sell things it owns, take it to court or close it down. HMRC will tell you before it takes any of these steps (gov.uk).

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Can't pay in full? Set up a Time to Pay arrangement

Contact HMRC as early as you can and ask for a Time to Pay arrangement. It's a plan to pay the VAT in monthly instalments, and HMRC agrees one only if it's affordable for your company.

You can set up a VAT payment plan online if your company:

• Has missed the deadline to pay a VAT bill.
• Owes £100,000 or less.
• Plans to pay the debt off within 12 months.
• Owes VAT for an accounting period that began in 2023 or later.
• Has no other payment plans or debts with HMRC.
• Has filed all its VAT returns.

The online service isn't open to companies on the Cash Accounting or Annual Accounting schemes, or making Payments on Account. If you can't use it, or you need longer than 12 months, call HMRC's VAT payment line on 0300 200 3831 (Monday to Friday, 08:00 to 18:00). There's no fixed time limit on a plan agreed by phone (gov.uk).

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What HMRC will ask for

HMRC wants your VAT registration number, a UK bank account you can set up a Direct Debit from, and details of your company's income and spending. Have a realistic monthly amount ready before you call.

HMRC will expect you to reduce the debt as much as you can first, for example by releasing stock, vehicles or shares. It may ask directors to put personal funds into the business, accept lending or extend credit (gov.uk). A short forecast helps you show the plan is realistic: here's how to plan your cash flow. If another tax bill comes up that you can't pay, you may be able to add it to the plan.

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What a payment plan costs

Interest keeps running on the unpaid balance at 7.75% a year, but a plan asked for within 15 days of the deadline means no late payment penalty, as long as you keep to it. Paying the plan off faster means less interest (gov.uk).

In our £20,000 example, spreading the bill over six equal monthly payments costs about £452 in interest. If you ask for Time to Pay later, between day 16 and day 30, it stops the bigger penalties that start on day 31.

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If HMRC says no, or you miss a payment

You can't appeal if HMRC turns down a payment plan, but you can complain, or go back with a better-evidenced offer. If you break a plan, HMRC can cancel it and charge both late payment penalties as if the plan never existed (gov.uk).

If you think you'll miss a payment, contact HMRC before it's due. HMRC will usually try to rearrange the plan with you.

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Time to Pay or borrowing: which costs less?

On interest alone, Time to Pay is usually the cheaper option, because HMRC charges 7.75% a year. Borrowing only makes sense for a short cash gap you can see before the deadline, and an iwoca loan needs a personal guarantee from a director.

When Time to Pay is the better choice: if the bill is already overdue, talk to HMRC first. VAT arrears can show up in credit checks and count against an application for business finance.

When borrowing can fit: if your company is waiting on customer payments or a seasonal peak and can see the gap before the VAT deadline, borrowing to pay a VAT bill pays HMRC in full and on time. It costs more than Time to Pay, so the case for it is timing, not price: there's no plan to agree, and you repay as soon as the cash arrives. Clear £20,000 a month after the deadline and the interest is about £666. An iwoca Flexi-Loan lets UK limited companies borrow £1,000 to £1 million, with terms up to five years. You can repay early at any time with no penalty, and you'll get a decision within 24 hours. Every new Flexi-Loan needs a personal guarantee from at least one director, so a director can be asked to repay if the company can't.

Guy Walker, founder of Dovetail and Slate, used his Flexi-Loan to cover VAT, salaries and suppliers over the summer:

"iwoca was different. There were no pushy salespeople. They were clear about the model, the amount, the payment structure, and the interest. I didn't even need to involve my finance team, which never happens with lending."

For a fuller side-by-side, see Time to Pay or a business loan.

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VAT payment FAQs

Can I pay VAT by credit card?

Yes, with a corporate credit card, but not a personal one. There's a non-refundable fee on corporate credit and debit cards, and no fee on a personal debit card. HMRC accepts card payments on the date you make them, even at weekends (gov.uk).

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Can I pay VAT in monthly instalments?

Yes, in two ways. A Time to Pay arrangement spreads a bill you can't pay, and the Annual Accounting Scheme spreads advance payments across the year, at 10% a month or 25% a quarter, before a final balancing payment.

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Do I pay VAT on the first £90,000 of turnover?

No. £90,000 is the threshold at which you must register for VAT. Once you're registered, you charge VAT on all your taxable sales and pay HMRC the VAT you've charged minus the VAT you can reclaim. It's based on sales, not profit (gov.uk).

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Can I defer a VAT payment?

Only in specific cases, such as import VAT through a duty deferment account or postponed VAT accounting. For an ordinary VAT bill, the option is a Time to Pay arrangement. Read more about when you can defer VAT.