Should I register for a VAT accounting scheme?
There are several special accounting schemes available to businesses. The most common are explained below.
The flat rate scheme
Under the flat rate scheme you calculate your VAT payment as a fixed percentage of your turnover. The percentage is decided based on the type of your business. The main advantage of the scheme is in reducing administration because you don't need to record the VAT charged on each individual purchase and sale. |  | Related literature: |
The cash accounting scheme
Under the cash accounting scheme you account for VAT on the basis of actual payments and receipts, and not on invoices issued and received. The main advantage of the scheme is that you only have to pay output VAT when you receive income from your customers, although a downside is that you don't get relief for input VAT until you pay your purchase invoices. | | Related literature: |
The annual accounting scheme
Under the annual accounting scheme you only need to file one VAT return each year. You will usually make nine interim VAT payments during the year, with a balancing payment due when you submit your return. | | Related literature: |
Where next?
Within VAT
- Should I be registered for VAT?
- VAT records
- Tax point
- Completing your first VAT return
- Can I reclaim all the VAT on my motor expenses?
Within Your partnership
- Setting up
- Accounting systems
- Payroll and PAYE
- National Insurance Contributions
- Income tax
- Exiting a partnership
