If your business is in a situation where it generally receives refunds of VAT, you may want to consider applying to HMRC to submit VAT Returns on a monthly basis.
This is particularly relevant to subcontractors in the building trade where they are either working on new build properties or subject to Domestic Reverse Charge for VAT. There are other business types where monthly VAT might be beneficial.
Monthly VAT is pretty simple. You submit your VAT Return every month instead of every quarter. Because there will be 12 returns to make, rather than just 4, there is extra admin – but you will be receiving your refunds more quickly.
If you believe that monthly VAT will be beneficial, the first step is to do some basic analysis to check this is the case. Don’t just look at historic data but consider what is likely to happen in the future. When switching to monthly VAT, you can’t usually change back to quarterly VAT returns for at least one year.
There is another minor advantage to monthly VAT in that you are allowed an extra 7 days to submit your returns – so long as any payments you need to make are electronic.
You can’t just decide to submit VAT Returns monthly. There is a form (VAT 484) which you can complete HERE or you can apply online: GOV.UK
We are here to help and advise. Don’t hesitate to contact us if you think that monthly VAT might be beneficial.
Relatable content: Cash VAT – Evidence of Purchase VAT – Flat Rate VAT Scheme