Value Added Tax (VAT) is a significant part of the financial responsibilities for many businesses. Keeping an organised VAT account helps businesses to stay on top of when their VAT payments are due and whether those payments have been made. In this way, businesses stay compliant and avoid costly penalties. 

For businesses registered for VAT in the UK, understanding when and how to pay this maintains good financial standing with HMRC. In this blog post, we will cover the key VAT return payment dates every business should know for 2025, along with tips to help you meet these deadlines efficiently.

Understanding VAT payments

VAT payments are due alongside the submission of VAT returns - there are several options in this regard that offer different schedules to fit various needs and cash flow strategies. Choosing the right payment schedule can help streamline your business's finances and ensure you stay compliant with HMRC’s VAT payment due dates. Here is a quick overview:

• Monthly VAT returns: ideal for spreading costs, monthly payments are due one month and seven days after the VAT period ends i.e. for a VAT return with a period end of 31 December, the due date is 7 February. Monthly VAT returns may be utilised by those regularly in a repayment position, to ensure repayments are received on a regular basis and assist with cash flow.
• Quarterly VAT returns: these are common among businesses and are aligned with VAT return periods, due one month and seven days after each quarter.
• Annual VAT returns: for those on the Annual Accounting Scheme, a single VAT return is due two months post-year-end, simplifying VAT management. Advance payments must be made, either on a monthly or quarterly basis with a final, balancing payment due on submission of the business's VAT return.

HMRC offers several VAT payment options to help businesses manage their VAT payments more efficiently:

• Direct debit: this method allows businesses to automate VAT payments directly from their bank accounts, reducing the risk of missing payment deadlines.
• Annual accounting scheme: this scheme is ideal for smaller businesses, allowing them to make advance payments based on an estimated annual VAT liability, with a final balancing payment due on submission of the business's return.
• Payments on account: for businesses with a high VAT liability (typically over £2.3 million annually), this scheme requires businesses to make interim payments in advance of their quarterly VAT return at the end of months two and three for each VAT return quarter. This payment is intended to cover part of the overall VAT liability for the VAT return quarter. The balancing payment for that quarter's VAT liability is due when the business submits its VAT return.

Making VAT payments: how and where?

Businesses can make VAT payments to HMRC through several methods:

• Direct debit: setting up a direct debit with HMRC ensures that your VAT payments are made on time. This method is particularly convenient as HMRC will automatically collect the amount due.
• Online or telephone banking: businesses can make payments directly from their bank account to HMRC. When using this method, be sure to allow extra time, as payments can take up to three days to process.
• Debit or corporate credit card: payments can also be made using a debit or corporate credit card online. Be aware that there may be a fee for credit card payments.

If your business has overpaid VAT, you may be eligible for a VAT refund from HMRC.