Annual accounting scheme-VAT

Question 1

Definition (3)

Answer 1

• 9 payments in the year with the 10th payment being a balancing payment due with VAT return
• the 9 payments are based on 1/10 of previous year’s total VAT libility
• The first payment is due 4 months after accounting year

Question 2

Conditions (2)

Answer 2

• Must have good VAT return and payment record

- Turnover must be <£1,350,000.

Question 3

Advantages (2)

Answer 3

• Reduces admin burden

- Regular and identical payments means it is easy to budget and anticipate cash flow.