If your annual turnover is higher than the threshold, as set by HMRC, you will need to register for VAT. Failure to do so may result in a penalty or fine. We’re going to take a look at how you can register, pay your VAT bill online as well as what happens if you miss a deadline.

Registration and payment of VAT can now be done over the internet

Your responsibilities as a VAT-registered company or a sole trader (self-employed) include paying VAT on any purchases you make from other businesses, ensuring you’re charging VAT on what you sell to other businesses and customers, sending through your VAT Return four times a year and then paying any owed VAT to Her Majesty’s Revenue and Customs (HMRC).

We’re going to unpack how you can pay any owed VAT online. This is substantially easier these days compared to the laborious process that people used to have to follow. However, there are still some steps that VAT-registered businesses must still go through before they may pay VAT online. You’re going to want to make sure you have the following information or documents at hand to be able to register yourself to pay VAT online.

• Your VAT number
• The postcode for your business’ registered address
• You VAT registration date
• The month at which your last VAT Return was sent
• Whatever the figure is in Box 5 of that Return

You will use this information to register on the Government’s website. You will also need to supply a few business and personal details before going to the next step. Once this has all been filled in, you’ll be granted a User ID and then a PIN for activation will be sent to you soon. Once you’ve set up your account on the Government Gateway, paying your VAT bill online is a breeze.

What is the due date for your VAT bill?

Most companies are obliged to submit a VAT Return every quarter. You must submit this one month and seven days following the end of the deadline. In most circumstances, you will need to pay any owed VAT at the same time.

If the three-month period in question was from January 1 to March 31, your VAT return would be due on May 7th, 2022. There will be no fixed dates for your quarterly Returns; instead, they will follow a rotating timetable.

How to pay your VAT bill online

Now that you’ve completed the registration procedure and confirmed your deadlines, it’s time to pay your VAT invoice. HMRC allows you to pay off your tax obligation in a variety of ways.

If your payment does not reach HMRC’s bank account by the deadline, you may be subject to a fine. You must pay by the final working day before your deadline if it occurs on a weekend or bank holiday.

If you need a payment by the next working day, you can use telephone banking, CHAPS, or your online bank account. There are several choices if you require the money in three working days or fewer. These include Direct Debit, Bacs, a standing order, a debit or corporate credit card, as well as at your bank or building society.

Your bank account is the simplest way to pay your VAT bill. Use your VAT registration number to log in and then pick the “pay with bank account” option. After that, you’ll need to confirm the transaction by providing the details for your bank account.

Paying your VAT bill late has consequences

If HRMC does not receive your VAT return or payment by the deadline, it will be treated as a “default”. As a result, further fees or fines may be applied. You may be obliged to pay extra taxes in addition to the VAT you have already paid as a result of your persistent inability to pay your taxes.

You need to know how much VAT you still owe in order to calculate the surcharge. A percentage is applied to the entire cost if you fail to pay the VAT on time. For a company with a yearly revenue of £150,000 or more, this can range from two percent for a second default to 15 percent for six or more defaults.