The following Value Added Tax guidance note by Tolley provides comprehensive and up to date tax information covering:
This guidance note provides and overview of the payments on account regime.
VAT registered businesses that have an annual VAT liability of more than £2.3m are required to make payments on account (POA).
Businesses that are required to make POA make interim payments at the end of months two and three for each VAT return quarter. The interim payment is intended to cover part of the overall VAT liability for the VAT return quarter. The balancing payment for that quarters' VAT liability will be settled when the business submits its VAT return payment.
POA must be made electronically and the cleared funds must be in HMRC's account by close of business on the due date (or on the last working day if that is earlier).
It should be noted that under VATA 1994, s 83 businesses have no right of appeal against being included within the POA regime. However, businesses who come within the scope of the POA scheme can use the alternatives suggested below rather than make POA.
UK VAT registered businesses need to make POA if:
When determining whether the threshold has been exceeded HMRC will include the following amounts:
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