732 Annual accounting

Part V8 HMRC Notices
Part V8 HMRC Notices | Commentary

732 Annual accounting

Part V8 HMRC Notices | Commentary

Annual accounting

October 2020

This notice cancels and replaces Notice 732 (November 2013).

1 Overview

1.1 What this notice is about

It explains the annual accounting scheme, who can use it and how to apply to join.

Main narrative treatment—V2.199.

1.2 What's changed since the previous version

Paragraph 5.2 has been updated to show a new telephone number for enquiries about VAT bank giro books.

Changes to the VAT helpline numbers.

1.3 The Annual Accounting Scheme

The annual accounting scheme allows you to complete just one VAT return each year, instead of the usual four. You pay instalments of the VAT that you expect to owe, so that you are not faced with a large VAT bill at the end of the year.

You can choose to make three (quarterly) or nine (monthly) instalments towards your end of year VAT liability. These must be paid by Direct Debit, Standing Order or other electronic means.

When you join the scheme HMRC calculates and notifies you of the instalment amounts and dates they're due. If you think we've got it wrong or your business changes, you can ask us to amend the instalments.

As well as paying by instalments, the scheme allows you to make additional voluntary payments towards your end of year VAT bill.

At the end of the year you send us your VAT return and any balance outstanding. If you have paid more money than the amount due on your return, we'll return the overpayment.

1.4 How the scheme helps

The main benefits of the scheme are:


    •     it helps you smooth out your cash

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