Concise Accountancy

Accountants and Registered Auditors

VAT compliance

VAT annual accounting

VAT Annual Accounting Scheme is suitable for company with annual sales below £1.35 million. If you opt to join VAT annual accounting scheme, your company only file VAT return once a year.

In some circumstances, HM Revenue and Customs may set the estimated VAT liability to be paid based on your previous year VAT return.

Payment options and arrangement with HMRC

Generally, your company simply makes VAT payment by direct debit or other approved electronic payment methods. This include payment online using debit or credit cards.

Your company must specifically request payment options to be on quarterly basis otherwise it will automatically be on monthly basis.

When to file VAT Return

Your company is required to submit your VAT return two months after your VAT return annual accounting period ended end together with the balance of VAT payment due.

Click here on how to complete a VAT return under the annual accounting scheme.

Flexibility of Annual Accounting Scheme

Your company is entitled to request reduction in the interim payments if your sales is well below your previous year.

Your company may request to withdraw from the VAT annual accounting scheme any time by writing to HMRC.

Advantages of VAT Annual Accounting Scheme

  • The scheme provides your company with a more predictable cash flow because your company will make regular payments on account throughout the year.
  • Possible cash flow advantage if your annual sales are foreseeable to increase each year.
  • Cut down substantial administrative work because you only need to send in one return per year

Your company must leave the VAT scheme if your annual sales reaching and over £1.6 million.

Other VAT schemes available for business are the VAT Flat Rate scheme, VAT Margin Scheme and VAT Cash Accounting Scheme.

Companies House filings

In addition to submitting VAT returns to HMRC, you must also deliver company accounts and confirmation statement to Companies House.

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