VAT Annual Accounting Scheme

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Eligibility

You can join the Annual Accounting Scheme if:

  • you’re a VAT-registered business
  • your estimated VAT taxable turnover is £1.35 million or less in the next 12 months

VAT taxable turnover is the total of everything sold that is not VAT exempt.

Exceptions

You cannot use the scheme if:

  • you left the scheme in the last 12 months
  • your business is part of a VAT registered division or group of companies
  • you’re not up to date with your VAT Returns or payments
  • you’re insolvent

Leaving the scheme

You must leave the scheme if:

  • you’re no longer eligible to be in it
  • your VAT taxable turnover is (or is likely to be) more than £1.6 million at the end of the annual accounting year
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