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In OT notes , chapter 25 , Annual accounting scheme there is a point (c) in the notes ” Nine monthly payments are made on account , each being 10% of the previous year’s VAT , in months 4 to 12 of the period with any balancing payment being made with the VAT return , or they may choose to pay quarterly instead” , I can’t get my head around this point even after listening to the lecture & reading it several times.
If the previous year’s VAT payments were £100,000 the trader would be required this year to pay £10,000 in each of months 4 to 12. The trader would then need to prepare and submit a VAT return within 2 months of the end of the annual VAT return period. If the total net VAT liability for the period amounted to £106,000 then the balancing payment would be £16,000.
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