Annual Accounting VAT Scheme Calculator UK 2026
Calculate your monthly or quarterly advance VAT payment schedule under the annual accounting scheme — file just one VAT return per year.
Annual Accounting VAT Payment Schedule Calculator
How the Annual Accounting VAT Scheme Works
Instead of filing four quarterly VAT returns, businesses on the annual accounting scheme file a single VAT return each year. This significantly reduces accounting administration and makes cash flow planning easier, as you know your payment schedule for the entire year in advance.
Advance payments are based on your previous year's VAT liability — HMRC does not require you to estimate your current year's VAT. The balancing payment (or refund if you overpaid) is due two months after your accounting year ends.
The scheme is open to businesses with annual taxable turnover up to £1.35 million.
Frequently Asked Questions
What is the annual accounting VAT scheme?
The annual accounting VAT scheme allows eligible businesses to file just one VAT return per year instead of four quarterly returns. During the year, you make advance payments (either 9 monthly or 3 quarterly instalments) based on your previous year's VAT liability. After the year ends, you file a single annual return and pay or receive the balancing amount.
Who can use the annual accounting VAT scheme?
You can join annual accounting if your estimated taxable turnover for the next 12 months is no more than £1.35 million (excluding VAT). New businesses can join from their first VAT return. You must leave the scheme if your taxable turnover exceeds £1.6 million in any 12-month period.
How are annual accounting VAT instalments calculated?
Instalments are based on your previous year's net VAT liability. Under monthly payments (9 instalments), each payment is 10% of the previous year's liability, paid at the end of months 4 through 12. Under quarterly payments (3 instalments), each is 25% of the previous year's liability, paid at the end of months 4, 7, and 10. The balancing payment (or refund) is due 2 months after your accounting period ends.
Can I leave the annual accounting VAT scheme?
Yes, you can leave annual accounting voluntarily at the end of any accounting period by writing to HMRC. You must leave if your turnover exceeds £1.6 million or if HMRC directs you to leave. On leaving, you must file a final annual return and settle any outstanding VAT. You cannot rejoin for 12 months after voluntarily leaving.
Is annual accounting or flat rate VAT better?
Annual accounting and flat rate are different types of scheme and can actually be used together. Annual accounting reduces admin by requiring only one return per year. The flat rate scheme simplifies VAT calculations by applying a fixed percentage to gross turnover. If your flat rate percentage is lower than your actual VAT rate, flat rate may save you money. Both can be used simultaneously if you qualify for both.