What to do if you cannot pay your VAT on time
Here are our recommendations
If you cannot pay your VAT by the deadline, contact HMRC before the deadline passes. This is always better than missing it without making contact.
Time to Pay arrangements
HMRC's VAT Payment Support Service agrees Time to Pay (TTP) arrangements for businesses that contact them proactively. A TTP spreads the liability over monthly instalments and suspends late payment penalties while the agreement is maintained. Contact us immediately if cash flow is a problem and we will help prepare the proposal to HMRC.
The consequences of missing the deadline
Late payment penalties apply at 2% of unpaid VAT after 15 days, 4% after 30 days, and a daily rate beyond 30 days. Interest also accrues daily at the Bank of England base rate plus 4%. A TTP agreed before the 30-day point stops the penalty escalation.
💡 Important: Tell us immediately if you think you will struggle to pay a VAT bill. The earlier we know, the more options are available. Saying nothing and missing the deadline will always lead to the worst outcome.
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