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How to reduce the administrative and cash flow burden of quarterly VAT filings

VAT

If you find it difficult to manage quarterly payments to HMRC to settle your VAT, why not consider the VAT Annual Accounting Scheme (AAS)?

Under the AAS you:

  • make nine payments on account towards your annual VAT bill – based on your last returns (or estimated if you’re new to VAT); and
  • submit one VAT Return a year.

When you submit your VAT Return you either:

  • make a final payment – the difference between your advance payments and actual VAT bill; or
  • apply for a refund – if you’ve overpaid your VAT bill.

The AAS wouldn’t suit your business if you regularly reclaim VAT because you’ll only be able to get one refund a year (when you submit the VAT Return).  Also, you can only join the AAS if your estimated VAT taxable turnover is £1.35 million or less....

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