How to pay HMRC as a small business

Published 7 January 2026

Table of contents

• What do I need to pay HMRC and when?
• HMRC payment methods
• How to find an HMRC payment reference
• How to pay HMRC for each business tax
• Tips for fixing a payment issue
• Set up a time to pay HMRC
• Pay HMRC on time with Xero
• FAQs on paying HMRC

Key takeaways

• Many small businesses make multiple payments to HMRC for Income Tax, VAT, PAYE, and Corporation Tax. The deadlines for payments fall throughout the year, and settling your bill on time is key for avoiding penalties and fines
• HMRC offers plenty of ways to pay your bill, including online banking, digital transfers, corporate debit and credit cards, and in-person bank and building society payments.
• To make sure your HMRC recognises your payment and can record it correctly, you need to use the right payment reference number and make sure you allow enough time for the money to reach HMRC ahead of the deadline. In some cases, you can use installments to spread the cost.

What do I need to pay HMRC and when?

If you’re self employed or running a small business, you could be paying HMRC for several different taxes:

• Income Tax on your personal Self Assessment
• VAT on what you buy and sell
• Corporation Tax, if you’re running an incorporated business
• Payroll – or more specifically, using the PAYE system to forward employees’ Income Tax, National Insurance, and other deductions

Over the years, HMRC has introduced more payment methods to settle your bill. Missing a payment deadline can result in a fine, so you need to keep on top of your small business tax obligations.

The HMRC payment deadlines are:

• Income Tax: 31 January, with the second payment on account due by 31 July
• VAT: 1 month and 7 days after the end of your VAT period (which depends on your business’s specific accounting year). Use HMRC’s VAT payment deadline calculator for your due date
• Corporation Tax: 9 months and 1 day after the end of your accounting period, for taxable profits up to £1.5 million
• Payroll: due by the 22nd of each month

HMRC payment methods

Payment types differ slightly depending on the tax.

• For Self Assessment, you can settle the bill using direct debit, online or mobile banking, telephone bank transfer, debit or corporate credit card, at your bank or building society, by cheque, or by tax code (as long as you meet certain conditions).
• For VAT, you can use online and mobile banking, corporate credit and debit cards, in-person payments at your bank or building society, standing orders, or telephone bank transfers.
• For Corporation Tax, use the same payment methods as Self Assessment (except you can’t pay through your tax code).
• For payroll, you can use direct debit, online or mobile banking (faster payments, CHAPS, or BACS), a PAYE settlement agreement, cheque (providing it reaches HMRC by the 19th and you have fewer than 250 employees), corporate debit card or (for an extra fee) credit card, and personal debit card.

How to find an HMRC payment reference

Here are ways you can easily find an HMRC payment reference.

For Income Tax and VAT

Your HMRC reference code for payment is your UTR number followed by the letter ‘K’. You should already have your UTR number to hand, but it’s also on paying-in slips if you receive them. For VAT, your payment reference is your 9-digit VAT registration number. You can find this in your online tax account and on letters from HMRC.

For Corporation Tax

Your HMRC payment reference number changes with every accounting period, so you need to update it every time you pay. You can find it on notices to deliver your tax return and reminders from HMRC. It’s also in your HMRC digital tax account.

For PAYE

Use the 13-character accounts office reference number. You can find it on letters about PAYE and in your HMRC online account.

How to pay HMRC for each business tax

With all business taxes, give yourself plenty of time to make the payment so that it clears before the deadline. Some online payments are instant, while physical or cheque payments can take days to be received and cleared.

• How to pay Self Assessment tax: Bills can be paid online for the first payment (due 31 January) and second payment on account (31 July). You can pay in full or set up regular payments so that the whole amount due is cleared by the respective deadlines. Allow 5 days for a direct debit and at least 1 day for faster payments and CHAPS.
• How to pay VAT: Bills can be paid using your online VAT account to set up a direct debit. You can also pay the government online if you’re using a debit or credit card, or online banking. Paying with an online bank account means you can choose the day the payment is made.
• How to pay Corporation Tax: Pay your tax on profits up to £1.5 million 9 months and 1 day after the end of your accounting period. For profits over £1.5 million, you need to pay Corporation Tax in installments. You can pay online using your government gateway account.
• How to pay PAYE: You can settle the bill with a direct debit, or choose a PAYE settlement agreement, which lets you make a single annual payment for all tax due. You can also make one-off PAYE payments for Class 1A National Insurance on work benefits you give employees.

Tips for fixing a payment issue

Payments don’t always go to plan. Here are some tips for getting it right.

• Always check the money has left your account, and that you’re using the right payment reference number.
• Make sure you know how long the payment will take to clear using your preferred method, so you can allow enough time to meet the deadline.
• If you miss a deadline or can’t pay your bill in full, contact HMRC as soon as possible. You can often set up an installments planspread your bill over several months.
• If you’re really stuck, get free impartial advice through MoneyHelper, which is backed by the government.

Set up a time to pay HMRC

If you need to set up a payment plan to settle your bill, you’ll need:

• The HMRC reference code for paying the specific tax
• Your UK bank account details
• Information on payments missed so far
• Details of company spending and income.

This will allow HMRC to work out how much you can repay each month. HMRC offers some specific guidance on setting a time to pay for each tax.

Pay HMRC on time with Xero

Dodge the hassle of making sure you’ve calculated your taxes accurately and paid the right amounts. With Xero accounting software, just connect your business bank feed so that transactions flow in automatically – ready for you to reconcile and to use in your tax returns. And when you're ready, simply submit your VAT, Income Tax, payroll, and Corporation Tax directly from within the software. Xero is fully set up for Making Tax Digital for VAT and Income Tax, too.

Xero also makes it easy to see how your available cash and how tax bills might affect your business. With a range of customisable reports and forecasts, you can plan for what’s up ahead in your business.

Try Xero for free

FAQs on paying HMRC

Here are answers to common questions about paying HMRC as a small business.

Can I pay HMRC by personal credit card?

No – you can use a corporate debit or credit card, but not a personal credit card.

When do weekends and bank holidays affect payment dates?

If your payment deadline falls on a weekend or bank holiday, make sure the money clears HMRC’s account by the working day before this date.

How do I confirm HMRC received my payment?

You should be able to confirm that HMRC has received the payment by checking your online HMRC account. It can take a day or two to register, so check back 24 hours after the payment has been made.

Can I pay HMRC in installments without a penalty?

Yes – if you set up an installment plan for Income Tax with HMRC, and all of the tax you owe is paid by the deadline, you won’t face a penalty.

But if you’re setting up an HMRC payment plan because you can’t pay your tax bill on time, you’ll pay interest on the monthly installments. This applies across Income Tax, VAT, PAYE, and company taxes.

What if I can’t access my HMRC online account?

You can get help accessing your HMRC account online and by phone.