Annual accounting scheme (AAS) ― eligibility, joining and leaving the scheme

Produced by a Tolley Value Added Tax expert

Value Added Tax

Guidance

This guidance note provides an overview of the main principles regarding the annual accounting scheme. It should be read in conjunction with the Annual accounting scheme (AAS) ― operating the scheme guidance note.

AAS ― main principles

The annual accounting scheme enables qualifying businesses to submit one VAT return each year. The business will need to pay its annual VAT liability via nine monthly or three quarterly instalments during the tax year. The payments must be made by either direct debit, standing order or another form of electronic payment.

When a business joins the scheme, HMRC will calculate the instalment amount and due date. If the business disagrees with the amount calculated or the business activities change, it should write to HMRC to request that the value of the instalments is amended (see below for contact details).

Businesses are entitled to make additional voluntary contributions towards their annual VAT liability if desirable.

At the end of the tax year, the business will need to submit a VAT return

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