Businesses often wish vat was paid monthly instead of quarterly. You want to know it’s paid, so you can forget about ensuring to save enough to pay the vat when it’s submitted. This scheme might be the answer for you!
With the annual accounting scheme you have the following benefits:-
- You complete just ONE vat return a year!
- You can choose to make nine equal interim payments at monthly intervals, by direct debit, based on an estimate of your VAT liability with a balancing payment or refund due once the vat return is filed!
- You are given two months instead of one month to pay any balance due!
- You can make additional payments as and when you wish.
If you are using this scheme it is advisable to check your VAT liability throughout the year, as you must notify HMRC if there are significant changes that might affect the amount of VAT you pay.
A business can join if your estimated turnover is less than £1.3 million. Once in the scheme, you can continue to use the scheme, until your turnover reaches £1.6 million. To join you must also be up to date with your VAT payments and not belong to a VAT group.
Applications are made on form VAT600AA and HMRC will inform you of the amount of the instalments to be made.
The scheme can be used with other vat schemes.
This scheme isn’t advisable if you receive quarterly repayments as you would have to wait a year for your refund. However, if you do have repayments and currently submit them in batches, this scheme could be useful to you to prevent you being charged the £100 late submission penalties, which HMRC will soon be applying.
Please contact us for more detailed information or to discuss whether the scheme would be beneficial to you.