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Q. I am newly VAT-registered (voluntarily). I believe that I will usually need to pay VAT to HMRC each quarter, rather than receiving a refund. However, I have some concerns about running up arrears in case I experience cash flow problems. Can I ask to complete monthly returns and pay monthly instead?

A: There is no statutory right to make monthly, rather than quarterly, returns. The legislation simply permits HMRC to allow a business to do so. The problem is that HMRC generally won't allow you to use monthly filing where you have VAT to pay - it's for businesses that usually receive repayments. You have a couple of options in order to avoid building up arrears. You can simply make a monthly payment of the estimated net VAT position to your account and sort the difference out when you complete the VAT return. Alternatively, you could consider using the annual accounting scheme. You would only be required to file one return, but you would make nine payments on account during the year. Information about the scheme is available here.
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Added By: Sharon Worger on 13th May 2021 - 16:39
Number of Views: 48
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