Paying VAT to HM Revenue & Customs or getting VAT refunds
In this section:
How to pay VAT due to HM Revenue & Customs
You can pay your VAT by a wide variety of means, including automatically by direct debit, electronically using Internet banking and other types of bank transfer, or in person at a bank using cash or cheque. You can also pay by post using a cheque or postal order.
This guide explains exactly what the options are and their advantages and disadvantages, and tells you which ones you can and can't use if you file your VAT returns online. It also explains how much extra time you get to pay for some of the payment methods.
Faster Payment
HM Revenue & Customs (HMRC) is currently unable to receive or make
payments using the Faster Payment Service, which is offered by some banks.
For a bank's customer to make a Faster Payment, both its bank and the payee's bank must be members of the Faster Payment Scheme. The Bank of England, who is currently HMRC's banking supplier, made a decision some time ago to withdraw from the provision of retail banking services to its customers (one of which is HMRC) and has not joined the Faster Payments Scheme.
HMRC is in the process of migrating its business to a new banking supplier but services will not be fully operational until about mid-2009. By that time HMRC and the bank expect to have developed the necessary changes to their systems to enable Faster Payments to be made, received and processed effectively and efficiently.
On this page:
- Different ways to pay your VAT
- Paying VAT automatically by direct debit
- Paying VAT by internet or telephone banking
- Paying VAT by BACS transfer
- Paying VAT by CHAPS transfer
- Paying VAT from an overseas bank account
- Paying VAT by bank giro
- Paying VAT by standing order
- Paying VAT by post
- More useful links
Different ways to pay your VAT
If your VAT return shows that you owe us VAT, you can pay it in the following ways:
- automatically by direct debit
- using Internet or telephone banking
- by bank transfer, from a UK or overseas bank
- in person at a bank using cash or cheque
- by post using a cheque or postal order
If you file your VAT return online, you cannot pay by cash or cheque - you have to use one of the other methods. Otherwise, the choice is yours.
If the net VAT payable to us on your return is less than £1, then don't pay us at all. Don't carry forward amounts of under £1 to your next VAT Return.
Paying VAT automatically by direct debit
If you choose to file your VAT return online you can also opt to pay by direct debit. This method is more convenient and secure than the other methods, and also gives you at least another ten calendar days to pay. We automatically collect payment on the third banking day after seven calendar days after the normal due date. If you're late submitting your return, it will be collected on the third banking day after you submit it.
You can't use our VAT Online direct debit payment facility if you:
- use the Annual Accounting scheme
- must make payments on account and send us quarterly returns
- submit VAT returns by post
Find out how set up an online VAT account and file your VAT return online
How to set up direct debit payments
Once you've enrolled for and activated your online VAT account, you'll need to send us a direct debit instruction for your bank, authorising us to take the VAT due from your bank account. You can either print out a form, complete it and post it to us at the address on the form, or, if you're the person who's authorised to sign VAT returns, you can fill in a form - and submit it - online.
You can find the direct debit facility through the 'submit returns' link on the 'my services' home page. This takes you to the home page for online VAT returns, where you'll be able to set up a direct debit instruction.
It normally takes five banking days to set up a direct debit. So, if you want to pay the VAT due on your VAT return by direct debit, you must set up the direct debit at least five banking days before you submit the return online. If you haven't allowed enough time before you submit your return, you'll have to pay by another electronic method.
The exact format of the reference that will appear on your bank statement against the payment we collect from you by direct debit is up to your bank, but should include, or include in part, the word 'VAT' and/or your VAT number.
If you need to change your bank account details, do this via your bank, who will automatically advise us of any changes. This applies whether it is a change of account or even a completely different bank. However, you shouldn't change your details within five banking days either side of your VAT return due date, as it may mean we can't collect your payment. If that happens and the payment is late, you'll be liable to a surcharge.
You can cancel the direct debit facility at any time. You must do this by telling your bank, and they will automatically advise us. If you intend to carry on submitting VAT returns online, you must pay by an alternative electronic method.
Only the amount shown as due to us when you submit your VAT online return will be collected by direct debit. We won't collect any surcharges, interest or penalties this way.
Read the terms and conditions that apply to the direct debit payment facility
Paying VAT by internet or telephone banking
If you pay your VAT using Internet or telephone banking, your bank will transfer your money electronically into our account, and we give you an extra seven calendar days after the normal due date for the payment to reach us. Because it takes between three and five banking days for the payment to reach our account, you should make the payment at least five banking days before the due date.
How to pay by internet or telephone banking
To pay your VAT by Internet or telephone banking, you'll need these details for our bank account:
Sort Code: 10 00 00
Account No: 52055000
You must give your VAT number - without spaces - as the reference number, so we know who the money comes from.
Paying VAT by BACS transfer
If you make a payment using Internet or telephone banking, your bank transfers your money electronically to our account using BACS (Bankers Automated Clearing System). If you wish to take advantage of the extra seven calendar days we give for electronic payments but don't have access to Internet or telephone banking, you can ask your bank to make a BACS transfer by other means. Your bank may accept telephone, fax or written instructions.
Because it takes between three and five banking days for a BACS payment to reach our account, you should make the payment no later than five banking days before the due date. You should also allow time for your instruction to reach the bank, and for the bank to process it.
How to pay by BACS transfer
To pay your VAT by BACS transfer, download a BACS authority form. It contains details of our bank account.
Obtain a BACS transfer request form
Paying VAT by CHAPS transfer
The fastest payment method available is a CHAPS (Clearing House Automated Payment System) payment. Your bank makes the payment electronically into our bank account on the same day, if you make the request early enough. For this method of payment, we give you an extra seven calendar days to pay.
If you need to pay us a very large amount of VAT, this might be the best method for you, but your bank will make a charge for a CHAPS payment.
How to pay by CHAPS
To make a CHAPS payment, you'll need to obtain a CHAPS form from your bank, complete it with the following details, and send it back to them:
Sort code: 10 00 00
Account no: 52055000
Beneficiary name: HMCE VAT
Bank: Bank of England
Branch: Threadneedle Street
Message to Beneficiary: you should put your VAT number here without spaces
Paying VAT from an overseas bank account
You can pay your VAT electronically from your bank, even if it's not in the UK. You get an extra seven calendar days from the normal due date for your payment to reach us, but you should check with your bank how long the transfer will take.
How to pay from abroad
If you want to make electronic payments from abroad you'll need to contact your bank for details of how to do this. Ask them how long the transfer will take and how much notice they need. You'll also need to give your bank or building society our bank account details:
IBAN Number: GB03BKEN10000052055000
BIC Code: BKENGB2L
Account name: HMCE VAT
Paying VAT by bank giro
You can pay your VAT by cheque or cash over the counter at a branch of your bank or building society, using a Bank Giro Credit Transfer form. If you use this method, the branch transfers the money electronically into our bank account, and we give you an extra seven calendar days for your payment to reach us.
How to pay by bank giro
You'll first need to check that your bank or building society will accept this method of payment. Then, you'll need to contact us so that we can arrange to send you a bank giro book with paying-in slips and counterfoils, pre-printed with your VAT number. To obtain your book, contact us quoting your VAT number and full contact details. You can send your request by email.
Each time a payment is due, complete a slip and take the book with your cheque or cash to your bank or building society. If you're paying by cheque it's best to go to a branch of the bank on which the cheque is drawn. Other banks may not accept it - or may charge you if they do - and the payment may take longer.
Paying VAT by standing order
If you have been accepted for certain accounting schemes, you may need to pay your VAT by standing order. We'll send you a standing order mandate that tells your bank how much and when to pay us. Fill in the rest of the form and send it to your bank, or use Internet or telephone banking to set up the standing order.
Paying VAT by post
If you're sending your VAT return by post, enclose your payment with it. You can send a cheque or a postal order. Making payment like this can be slower and less secure than using electronic payment methods.
HM Revenue & Customs plans to phase out paper VAT returns, starting in April 2010. From then, if your turnover is over £100,000 - or you are newly VAT registered - you will have to file your VAT returns online and pay VAT electronically.
You are therefore advised to register to file your VAT returns online as soon as possible.
If you use the Annual Accounting Scheme you can't send your interim payments by post, as these payments must be made electronically.
How to pay by post
Make sure you cross all cheques and postal orders 'A/C Payee only'. Make them payable to HM Revenue & Customs and put a line through any spaces on the pay line. Put your VAT registration number on the back of your cheque.
Send your payment and return in the reply paid envelope we sent you.
If you have mislaid the envelope that came with your VAT return, then please post it to the following address, and not the address on the envelope - that only works for reply paid envelopes:
The Controller
HM Revenue & Customs VAT Central Unit
Alexander House
21 Victoria Avenue
Southend-on-Sea
SS9 1AT
More useful links
How to complete and file a VAT return
How to set up an online VAT account and file your VAT return online
