How to pay your taxes online

Mar 1, 2022 | Tax

From self-assessment to corporation tax, the quickest and easiest option to pay your tax bills in 2022 is often online.

There are a few ways in which you can pay your taxes, but the rules can be complex and subject to future legislative changes.

Most taxpayers who have liabilities outside of PAYE use HMRC’s online payment system to pay their tax bills.

And late last year, HMRC became the first tax authority in the world to integrate the concept of open banking into its systems.

That gives you an alternative to paying tax with a debit card or corporate credit card by offering a quicker and easier to pay tax.

Here’s an overview how you can pay each type of tax, and the deadlines and late-filing penalties that might apply.

Paying self-assessment

If you’re self-employed, you need to file a tax return via self-assessment on or before 31 January each year. This relates to the previous tax year.

After filing your tax return, you’ll see your tax calculation and how much you need to pay – and there are two deadlines to pay it by.

The deadlines are 31 January for paying your tax bill from the previous year and the first payment on account, plus 31 July for your second payment on account.

The fastest way to pay is through approving payment through your online banking account, ensuring it goes through on the same or next day.

Instant late-payment penalties won’t be charged this year if you either pay your bill in full or enter into a payment plan on or before 1 April 2022.

Paying corporation tax

The deadline for sending in your company tax return is usually 12 months after the end of your accounting period.

There’s a separate deadline for paying your corporation tax on any profits, which is nine months and one day after the period-end.

You can pay your corporation tax bill online using your business tax account. Your details will automatically be pre-populated for you.

Once logged in, click ‘make a corporation tax payment’ and then choose a way to pay – via direct debit, bank account, or corporate credit card.

If your corporation tax payment is late, you might be charged interest and penalties.

Paying VAT

Most VAT-registered business owners use cloud software to keep records and comply with their monthly or quarterly, and annual filing obligations.

The VAT payment deadline will be shown on your digital returns, just make sure you pay any liability before that deadline passes.

Open banking allows you to pay your VAT bill directly using your online or mobile bank account. This ensures payment is received within two hours.

Let us take the strain

Regardless of your business structure or what your tax liabilities are, we can handle your tax returns and pay what you owe to HMRC.

For more information, email or call us on 01322 555373.

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