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August 2023

The Different Types of VAT Accounting Schemes

If you are a VAT-registered business here in the UK, you may be wondering which VAT accounting scheme is best for you. There are several options available, each with its own advantages and disadvantages. We will explain the main features and benefits of the different types of VAT accounting schemes, and help you decide which one suits your business needs.

What is a VAT accounting scheme?

A VAT accounting scheme is a way of calculating and reporting your VAT to HMRC. It does not change the amount of VAT you charge or pay on your sales and purchases, but it may affect how and when you do so.
There are various VAT accounting schemes designed to simplify your VAT accounting and improve your cash flow. Some of them have specific eligibility criteria, such as your turnover, type of business, or payment methods. You can choose to join or leave a VAT accounting scheme at any time, as long as you meet the conditions and notify HMRC.

What are the different types of VAT accounting schemes?

The most common types of VAT accounting schemes are:

Which VAT scheme should I use?

The best VAT scheme for you depends on various factors, such as:

You should compare the pros and cons of each scheme and see how they affect your business performance and tax obligations. You should also review your choice regularly and make changes if necessary.

If you need more guidance or advice on choosing a suitable VAT scheme for your business, you can give us a call and we can help.