Paying VAT

By Tolley

The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:

  • Paying VAT
  • VAT return payments
  • VAT repayments
  • Claiming VAT credits and refunds
  • Repayment of VAT incorrectly accounted for
  • Claims for refunds not falling within VATA 1994, s 80
  • Amounts due to / from HMRC
  • Selling goods in satisfaction of a debt
  • Mini One Stop Shop (MOSS)

This guidance note provides an overview of how VAT registered businesses will need to pay VAT and the procedure that needs to be followed in order to obtain a VAT refund.

VAT return payments

Please see the Guide to completing a UK VAT return, Guide to completing a UK VAT return for businesses using the Flat Rate Scheme and Submitting online VAT returns guidance notes for more information on how to complete and submit a VAT return.

SI 1995/2518, regs 25(1)(4), 40(2); SI 1996/1250, reg 9; SI 2000/258, reg 3; De Voil Indirect Tax Service V5.108A–V5.109B (subscription sensitive)

The VAT return and any payment due must reach HMRC by the due date stated on the return. This will be, for a normal return:

  • no later than one month after the end of the VAT return period, and
  • no later than one month after the effective date for cancellation of registration (or, in the case of a taxable person not registered, one month after the date when liability to be registered ceases)

Businesses can check the payment deadline using the payment deadline calculator  provided by HMRC.

Please note that if the amount of VAT due to HMRC is less than £1, then the business is not required to remit the payment. The amount should be carried forward to the next return.

VATA 1994, Sch 11, para 2(13)

Businesses must use one of the following methods to pay the VAT due to HMRC:

  • direct debit for returns submitted online, unless the business makes payments on account and submits quarterly returns
  • bank or building society services to pay by internet,

More on VAT compliance and bad debt relief: