Concise Accountancy

Accountants and Registered Auditors

VAT compliance

File a VAT return under the Annual Accounting Scheme

There are special rules that apply to file a VAT return under the VAT Annual Accounting Scheme. This VAT Annual Accounting Scheme is suitable for businesses with a turnover of up to £1.35 million. If your turnover has exceeded this threshold, your business can stay in the scheme as long as your turnover does not go over £1.6 million significantly. Thereafter, your business must leave the scheme at the end of the annual accounting VAT Return year.

Even though you only require to file a VAT return under the Annual Accounting Scheme, you must pay your VAT by instalments. You can choose to pay quarterly or 9 monthly. You estimate the amount of VAT you expected to owe to HMRC at the end of your Annual Accounting VAT return period. Your VAT instalment payments must be paid by Direct Debit, Standing Order, bank transfer or by BACS.

Under this scheme, you complete your VAT return in the normal way for the VAT period.

How to complete and file a VAT Return under the Annual Accounting Scheme

Box 1VAT due in this period on Sales£100,000.00
Box 2VAT due in this period on EC acquisitions£0.00
Box 3Total VAT due (the sum of Boxes 1 and 2)£100,000.00
Box 4VAT reclaimed in this period on purchases£45,345.00
Box 5Net VAT to be paid to Customs or reclaimed by you (Difference between Boxes 3 and 4)£54,655.00
Box 6Total value of sales, excluding VAT£500,000
Box 7Total Value of purchases, excluding VAT£226,725
Box 8Total value of EC sales, excluding VAT£0.00
Box 9Total value of EC purchases, excluding VAT£0.00
Source: GOV.UK

How to fill in each box is explained

You will fill in Box 1 to Box 9 as you would normally do under the Standard VAT scheme except for Box 5.

BOX 5 – Do not deduct any instalments you paid to HMRC from net VAT to be paid to HMRC.

Say, you choose to pay your VAT instalments in 9 months at £6000 per month. You do not deduct £54,000 already paid to HMRC from £54,655. Instead, you file your annual accounting VAT return and the balance of the payment owed to HMRC of £655.

Companies House filings

Besides, maintaining good VAT accounting records and submitting your VAT return on time to HMRC, if your VAT registered business is a limited company, you must also deliver your company accounts and confirmation statement to Companies House promptly.

If you require any help with your VAT returns, company accounts and confirmation statement filing, feel free to contact our accountants, they will be more than happy to assist you to comply with your filing requirements.

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