How to Pay HMRC

Paying HMRC sounds straightforward, but in practice it causes a lot of confusion and unnecessary stress. I regularly speak to people who are unsure how to pay, when to pay, which reference to use, or whether they are about to send money to the wrong place. A simple mistake here can lead to late payment interest, penalties, or HMRC chasing money that has already been paid but not allocated correctly.

In this article, I will explain clearly how to pay HMRC, the different payment methods available, what reference numbers matter, and how to make sure your payment is credited properly. This is based on current UK processes and what I deal with day to day when helping clients manage their tax obligations.

What You Are Paying HMRC For

Before making any payment, it is essential to understand what the payment relates to. HMRC collects different types of tax, and each has its own reference.

Common reasons people pay HMRC include:

• Self Assessment Income Tax
• Payments on account
• VAT
• PAYE and National Insurance
• Corporation Tax
• Capital Gains Tax

The method of payment may be the same, but the reference you use must match the tax type, otherwise HMRC may not allocate the payment correctly.

Paying HMRC for Self Assessment

Self Assessment is one of the most common payments individuals make.

You can pay your Self Assessment tax bill using:

• Online or telephone banking
• Debit card
• Bank transfer
• Direct Debit
• At your bank or building society in limited cases

The most important thing is the reference number. For Self Assessment, this is your 10 digit Unique Taxpayer Reference followed by the letter K.

If this reference is wrong or missing, HMRC may not know what the payment is for.

Paying HMRC by Bank Transfer or Online Banking

This is the most common and reliable method.

You send money directly from your bank to HMRC’s bank account. The details depend on the type of tax, but HMRC provides official bank account numbers for each.

For Self Assessment, you must include:

• The correct HMRC bank details
• Your correct payment reference

Payments made this way usually reach HMRC on the same or next working day, depending on your bank.

From my experience, this method causes the fewest issues when done correctly.

Paying HMRC by Debit Card

You can pay HMRC online using a debit card through your Government Gateway account.

There is no fee for debit card payments. Credit cards are no longer accepted.

This method is useful for people who want instant confirmation, but it is important to note that daily card limits may apply depending on your bank.

Paying HMRC by Direct Debit

Direct Debit can be set up through your HMRC online account.

This is often used where people want HMRC to collect payment automatically on an agreed date. It can also be used for payment plans.

Direct Debit is convenient, but it takes several days to set up, so it is not suitable for last minute payments close to a deadline.

Paying HMRC for VAT

VAT payments must follow Making Tax Digital rules for most businesses.

VAT is usually paid by:

• Direct Debit linked to MTD compatible software
• Online banking or bank transfer

VAT payment references are different from Self Assessment references and are specific to your VAT registration number.

Using the wrong reference is one of the most common VAT payment errors I see.

Paying HMRC for PAYE

PAYE payments relate to tax and National Insurance deducted from employees.

These payments are usually made monthly or quarterly and must use the correct Accounts Office reference.

This reference is different from a UTR and is specific to payroll.

PAYE payments made with the wrong reference often result in HMRC chasing employers unnecessarily.

When HMRC Payments Are Due

Deadlines depend on the type of tax.

For Self Assessment:

• Tax is usually due by 31 January
• Payments on account may also be due on 31 January and 31 July

For VAT:

• Usually one month and seven days after the VAT period ends

For PAYE:

• Usually by the 22nd of the following month if paying electronically

Missing deadlines leads to automatic interest and penalties, even if the delay is short.

What Happens After You Pay HMRC

Once payment is made, it should appear on your HMRC account.

This can take a few days to update. If you have paid close to a deadline, HMRC usually uses the payment date rather than the date it shows online, provided it was sent on time.

I always recommend keeping proof of payment such as bank confirmations until the account is fully updated.

Common Mistakes I See When Paying HMRC

Based on my experience, the most common issues are:

• Using the wrong payment reference
• Paying the wrong HMRC account
• Assuming HMRC will automatically work out what the payment is for
• Paying too late because of bank processing times
• Not realising a payment on account is due

These mistakes are easy to avoid once the system is understood.

What to Do If You Cannot Pay HMRC

If you cannot afford to pay HMRC in full, ignoring the problem makes it worse.

HMRC offers Time to Pay arrangements which allow you to spread the cost over instalments. These must usually be agreed before enforcement action begins.

An accountant can help negotiate this and ensure the arrangement is realistic and properly recorded.

How an Accountant Helps With HMRC Payments

An accountant’s role is not just about calculating tax. It is also about making sure payments are made correctly and on time.

In my work, I often help clients by:

• Confirming exactly what needs to be paid
• Checking HMRC calculations
• Making sure the correct references are used
• Planning cash flow around deadlines
• Dealing with HMRC if something goes wrong

This reduces stress and avoids the knock on effects of misallocated payments.

Key takeaways

Paying HMRC is not complicated once you understand what you are paying, how to pay it, and which reference to use. Most problems arise not from the amount due, but from simple administrative errors.

From my experience, taking a few minutes to double check payment details can save months of hassle later. If you are ever unsure, it is far better to clarify before sending the money than to fix it after HMRC has allocated it incorrectly.