Everything you need to know to pay VAT online

Updated on May 25, 2022

If your annual turnover exceeds the VAT threshold, you must register for VAT in order to avoid getting into trouble with the tax authorities. In this section, we explain how to register, how to pay your VAT bill, and what happens if you miss a deadline..

Registering to pay VAT online

As a VAT-registered firm or sole trader (self-employed), your duties will include:

Purchases from other firms are subject to VAT.
When you sell to other firms and customers, you should collect VAT.
Send in your VAT return! Visit us once every three months.
Remit VAT to HM Revenue & Customs
This is the final topic that we’ll discuss in further detail. Even if you’ve already registered for VAT, you’ll still have to fill out an application on the Government Gateway website before you can make an online payment. Preparation is key before you begin the registration process:

Your tax identification number
The postal code of your primary company location and the day you became VAT registered
The final month of the last VAT return that you filed was.
Amount shown in Box 5 on your most recent VAT return Return
A User ID will be provided to you after you provide basic personal and company information. After that, you’ll receive an email with an activation PIN. Your VAT bill can be paid online once your account is activated.

When do you need to pay your VAT bill?

Most firms are required to submit a VAT Return on a quarterly basis. Due date is one month and seven days after the conclusion of the given period. In most cases, payment must be made at the same time as the application.

Your VAT Return and payment are due on May 7, 2022 if the three-month period in question runs from January 1 to March 31, 2022. A calendar year isn’t necessary for your quarterly dates; they’ll instead work on a rolling cycle.

How to pay your VAT bill

It’s finally time to pay your VAT bill after you’ve registered and reviewed the deadlines. You can settle your debt in a number of ways that have been allowed by HMRC.

You will be penalised if your payment does not reach HMRC’s bank account by the due date. If your deadline falls on a weekend or bank holiday, the payment must be received no later than the last working day before this.

Telephone banking, CHAPS, or your online bank account are all options if you require the money the same day or the next day. A debit or corporate credit card can be used to make a three-day payment if you’re using the Annual Accounting Scheme or Payment on Account. You can also make a three-day payment using a Direct Debit, Bacs, or standing order.

We’ve found that paying your VAT bill online through your bank account is the most convenient choice. By signing in with your VAT registration number, you can do so. Select “pay by bank account” as your payment method. After that, you’ll be prompted to go into your bank account to confirm the payment.

What happens if your VAT bill payment is late?

HRMC will record a “default” against you if it does not receive your VAT Return or payment in full by the deadline. Surcharges or penalties may be imposed as a result. This new default status could have effects for up to a year after it is implemented. If you default again during this time period, you will be subject to a surcharge on top of the VAT you already owe, as well as an additional 12-month extension.

If you file your VAT return late, you won’t be hit with a penalty.

By the due date, you have paid all of your VAT.
You do not owe any taxes.
Refunds for VAT are owed to you.
When it comes to the surcharge, how much you owe depends on how much VAT you still owe. Taxes are levied at a predetermined rate, which rises each time you default over this period. This can range from 2% for a second default to 15% for six or more defaults for a business with a turnover of £150,000 or more.

If you’re a business owner, ANNA Money is your go-to business account and tax app. You can focus on running and expanding your business instead of dealing with the drudgery of paperwork thanks to our wide selection of tools and services (including free templates for VAT filing). Send us an email at [email protected] if you have any questions, and we’ll get back to you right away.