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....