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Quarterly, monthly or annual: which suits you?
A general guide, not advice, based on GOV.UK guidance on the VAT Annual Accounting Scheme.
Quarterly, monthly and annual filing compared
| Quarterly | Monthly | Annual Accounting Scheme | |
|---|---|---|---|
| Returns a year | 4 | 12 | 1 |
| Who uses it | Most businesses | Mainly businesses that regularly reclaim VAT | Turnover up to £1.35 million, by joining the scheme |
| Payments | With each return | With each return | Advance payments, then a balancing payment |
| Repayments | Up to 4 a year | Up to 12 a year | 1 a year |
| Return due | 1 month and 7 days after each quarter | 1 month and 7 days after each month | 2 months after the end of the year |
Every option uses Making Tax Digital: you keep digital records and file through MTD software, however often you file.
How the Annual Accounting Scheme works
- Joining: your estimated VAT taxable turnover must be £1.35 million or less.
- Leaving: you must leave if your VAT taxable turnover is, or is likely to be, more than £1.6 million at the end of the annual accounting year.
- Advance payments: either 9 monthly payments of 10% of your estimated VAT bill, at the end of months 4 to 12, or 3 quarterly payments of 25%, at the end of months 4, 7 and 10.
- Return and balancing payment: within 2 months of the end of your accounting year. The balancing payment is the difference between your advance payments and the VAT on your return.
Who cannot use annual accounting
- Businesses that left the scheme in the last 12 months
- Businesses in a VAT group or division
- Businesses not up to date with their VAT returns or payments
- Businesses that are insolvent
How to choose
- Choose annual accounting if your VAT bill is steady, you usually pay VAT rather than reclaim it, and you want one return a year with fixed payments.
- Stay quarterly if your sales vary a lot, you reclaim VAT some quarters, or you want your payments to match what you actually owe each quarter.
- Ask about monthly returns if you regularly reclaim VAT, for example because you sell zero-rated goods, so you get repayments sooner.
Annual accounting means fewer returns, but you still need to keep your records up to date all year.
Monthly, quarterly or annual returns, from £5 a month
Swift VAT Pro reads your VAT periods and due dates from HMRC, so you file the right period whichever scheme you use.
- Connect to HMRC on HMRC's own page with your Government Gateway sign-in. We never see that password.
- See your VAT periods, due dates, amounts owed and payments, read from HMRC.
- Upload your nine box totals as a CSV. Box 3 and Box 5 are worked out and every box is checked.
- Submit and keep HMRC's receipt. Reminder emails arrive before each due date.
No card needed · From £5 a month · Plans for up to 100 businesses · Filing through HMRC's MTD service since 2019
Final thoughts
Quarterly filing is the default and suits most businesses. The Annual Accounting Scheme can save admin for steady businesses that pay VAT, as long as you keep up with the advance payments. If you regularly reclaim VAT, more frequent returns are usually better.
Disclaimer: This guide gives general information, not advice for your business. If you are unsure how the rules apply to you, speak to an accountant or contact HMRC.
Frequently asked questions
Checked against GOV.UK guidance on the VAT Annual Accounting Scheme, GOV.UK VAT return deadlines and VAT Notice 700/22. November 2026.
Can I file VAT once a year?
How do Annual Accounting Scheme payments work?
Who should not use annual accounting?
When must I leave the Annual Accounting Scheme?
Does Making Tax Digital apply to annual returns?
Monthly, quarterly or annual returns, from £5 a month.
Swift VAT Pro files your return to HMRC from the spreadsheet you already keep. From £5 a month.
No card needed · 2,900+ VAT returns filed since 2019