A Layman’s Guide to Paying VAT Online

After changes between 2010 and 2012, it’s no longer possible (with virtually no exceptions!) for companies to submit paper VAT returns to HMRC, regardless of their turnover; all businesses must now pay their VAT online.

You won’t find anything about VAT thresholds or that sort of thing here, but we’ve written something about it on this page.

There are a few steps to paying VAT online, but the process isn’t as difficult as it might sound and it doesn’t take too long either!

Step 1: Signing up for HMRC’s Online Services/Government Gateway

In order to pay your VAT online you must first apply to do so here. You’ll need a few things to hand before you can sign up:

  • VAT Number
  • Principal Place Of Business postcode
  • Date of registration for VAT
  • Final month of last VAT return submitted
  • Box 5 figure on last VAT return submitted

Step 2: Activating Your Account

Once you’ve entered the information above, and a few details about yourself, you’ll receive a user ID that will allow you to settle your VAT online! However, before you can access any of HMRC’s other online services, you’ll need to enter an activation PIN. Somewhat unbelievably this ISN’T sent by email, but by snail mail, so make sure you enter the right address when you’re signing up! Because the PIN comes in the post, you’ll usually have to wait about a week to receive it. The code is only valid for 28 days, so make sure you enter it pretty sharpish once you’ve received it!

Step 3: Settling your VAT online!

Yup, it’s that simple; once you’ve signed up for HMRC’s Online Services and entered your activation code you can log in using your User ID at any time. So make sure you keep it safe!

However, the really neat thing is that once you’ve done all this you can file your VAT return online from within KashFlow. There’s more information on how to do that here, but it’s really just a case of running a report and clicking a button!


And that’s just about it! A lot of small business owners panic about paying their VAT online but the process is fairly straightforward and can be carried out without even having to leave KashFlow; not as scary as it seems, right?

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