The VAT Payment Methods HMRC Actually Accepts

You can pay by bank transfer, Direct Debit, debit card or corporate credit card. Just make sure you use your nine-digit VAT number as the payment reference. 

This guide explains the main ways to pay VAT, key deadlines, HMRC bank details, late-payment charges and common mistakes to avoid. 

For most businesses, the VAT payment deadline is one calendar month and seven days after the end of the VAT accounting period. The same deadline usually applies to submitting your VAT Return. 

Your VAT online account shows the exact date your return is due and when your payment must be made. Annual Accounting Scheme users pay by instalments (9 monthly or 3 quarterly) based on their estimated VAT bill, with a final balancing payment due when they submit their annual VAT Return (within 2 months of the end of their accounting year). 

Businesses making VAT payments on account pay interim amounts on the last working day of the second and third months of each VAT quarter, with a balancing payment for the quarter due with their VAT Return. 

There are several ways to pay your VAT bill to HMRC, but if your VAT return deadline is close, some are much faster than others.

Some VAT payment methods take longer to process, so it is sensible to allow enough time before the deadline. 

Yes, you can pay VAT by corporate credit card. HMRC also accepts corporate debit cards and personal debit cards, but you cannot pay VAT using a personal credit card. 

HMRC charges a non-refundable fee for corporate credit and corporate debit card payments. There is no fee for using a personal debit card. 

For card payments, HMRC accepts your VAT payment on the date you make it, including weekends and bank holidays, rather than the date the money reaches HMRC's account. 

If you're paying your VAT bill from a UK bank account, use: 

• Sort code: 08 32 00 
• Account number: 11963155 
• Account name: HMRC VAT 

 Always cross-check these details against your VAT online account or GOV.UK's 'Pay your VAT bill' page before sending funds, as HMRC bank details can change. 

How Do I Pay VAT From an Overseas Bank Account? 

If you are paying UK VAT from an overseas bank account, HMRC allows you to make the transfer by CHAPS. 

• IBAN: GB36 BARC 2005 1773 1523 91 
• BIC: BARCGB22 
• Account name: HMRC VAT 
• Bank: Barclays Bank PLC, 1 Churchill Place, London, United Kingdom, E14 5HP 

Overseas payments should be made in sterling. Your bank may charge you if it needs to convert another currency. 

For a normal VAT payment, use your 9-digit VAT registration number with no spaces. You'll find it on your VAT registration certificate or in your VAT online account. 

For example:  123456789

Paying your VAT bill online is simple once you know what to check. Just remember that filing your VAT Return and paying the bill are two separate things. 

1. Submit your VAT Return using MTD-compatible software, where required. 
2. Check how much you owe and the exact payment deadline. 
3. Choose a payment method that will reach HMRC in time. If the deadline is close, Faster Payments, online banking, CHAPS or card may be quicker. 
4. Use the right payment reference. For a normal VAT bill, this is your 9-digit VAT registration number with no spaces. 
5. Check the company and VAT number before you pay, especially if you manage more than one business. 
6. Keep your payment confirmation or transaction reference for your records. 
7. Check your VAT online account once the payment has processed to make sure it has been recorded correctly. 

If you pay your VAT bill late, HMRC may charge penalties as well as interest. The longer the VAT stays unpaid, the more it can cost. 

For VAT periods beginning on or after 01/04/2025, where payment is due on or after 31/05/2025, the current rules generally work like this: 

• Up to 15 days late: no late-payment penalty if you pay in full, but interest still runs. 
• 16 to 30 days late: a 3% penalty can apply to the VAT still unpaid at day 15. 
• 31 days or more late: another 3% can apply to the amount still unpaid at day 30. A second penalty also starts from day 31, building up daily at an annual rate of 10%. 

If you cannot pay in full, speak to HMRC as early as possible. A Time to Pay arrangement may help reduce or prevent some late-payment penalties, depending on your circumstances. 

Does HMRC Charge Interest on Late VAT? 

Yes. HMRC charges late-payment interest from the first day your VAT is overdue until you pay it in full. 

This interest is separate from any late-payment penalty, so you may still be charged interest even if you pay within the first 15 days and avoid a penalty. 

HMRC's interest rate can change, so check the latest rate before making a late payment.

What If I File My VAT Return Late? 

Late filing has its own penalty-points system. one point per late return. The £200 penalty is charged once you reach 2 points (annual filers), 4 points (quarterly filers), or 5 points (monthly filers), with a further £200 for each subsequent late return until the points reset. 

So even if you cannot pay the VAT straight away, file your VAT Return on time. If paying is the problem, contact HMRC early to discuss your options.

The difference is stark: on these assumptions, paying on day 60 could cost around £1,872 more than paying on day 14. 

If you cannot pay everything at once, even a part payment may help. It can reduce the amount HMRC uses to work out later penalties and limit the interest building up afterwards.

These figures are illustrative. The actual cost will depend on how much remains unpaid, any payments or Time to Pay arrangement, and HMRC’s interest rate during the period. 

Paying VAT late now costs more than it did under the previous rules. 

For current VAT periods: 

• the penalty at day 15 increased from 2% to 3% 
• the additional penalty at day 30 increased from 2% to 3% 
• the daily penalty from day 31 increased from an annual rate of 4% to 10% 

HMRC changed how it calculates late-payment interest from 06/04/2025, increasing the formula from Bank Rate + 2.5% to Bank Rate + 4%. 

The current Bank of England Bank Rate is 3.75%, so HMRC’s late-payment interest rate is: 

3.75% + 4% = 7.75% 

From 09/01/2026, the current HMRC rates are: 

• Late-payment interest: 7.75% 
• Repayment interest: 2.75% 

In simple terms, HMRC currently charges 7.75% when tax is paid late, while qualifying repayments from HMRC earn interest at 2.75%. These rates can change if the Bank of England Bank Rate changes. 

Most VAT payment problems are surprisingly simple. They usually happen because one small step gets missed. 

1. The return is filed, but the payment is forgotten. Filing your VAT Return does not automatically pay the bill. 
2. Direct Debit is set up too late. If it is not in place early enough, HMRC may not collect the first payment, and you may need to pay another way. 
3. Bacs is left too close to the deadline. It usually takes 3 working days to reach HMRC, so leaving it until the last minute can cause problems. 
4. The wrong payment reference is used. This is easy to do if you manage several companies. For a normal VAT bill, use the correct 9-digit VAT number with no spaces. 
5. Nobody checks the payment afterwards. Keep the payment confirmation and make sure the money has left your bank and been recorded correctly. 

These are rarely complicated VAT mistakes. They are usually simple process slip-ups. 

A payment calendar, clear internal checks and Direct Debit, where available, can make late VAT payments much less likely. 

Struggling to pay your VAT bill in one go? You may be able to agree an HMRC Time to Pay arrangement and spread what you owe over manageable instalments. 

You may be able to set up a VAT payment plan online if you: 

• have already missed the payment deadline 
• owe £50,000 or less 
• owe VAT for a period beginning in 2023 or later 
• have filed all your tax returns 
• have no other HMRC debts or payment plans. 

If you use Cash Accounting, Annual Accounting or VAT payments on account, you cannot currently use the online service, but you may still be able to discuss a payment arrangement directly with HMRC. 

There is no fixed repayment period. HMRC will look at what you can realistically afford and agree a plan based on your circumstances. 

The sooner you contact HMRC, the better. An agreed Time to Pay arrangement can help reduce or avoid some VAT late-payment penalties, although late-payment interest will normally continue until the VAT is fully paid. 

If your VAT Return shows that HMRC owes you money, you will usually have nothing to pay for that period. Instead, HMRC will normally process the VAT repayment automatically. 

If HMRC has your repayment bank details, the money can be paid straight into your account. If not, HMRC will usually send a cheque. 

One thing to watch out for: HMRC does not use the bank details linked to your VAT Direct Debit for repayments. If you want the money paid directly into your bank account, make sure your repayment details are up to date in your VAT online account. 

HMRC says most VAT repayments are made within 30 days, although it can take longer if the return needs to be checked. 

If you owe HMRC other taxes, they may also use the repayment to reduce those debts first.