Can I Pay VAT Early??

gibbyni

Strange question I know but this is why. Im on Quarterly returns so every 3 months I have a big VAT bill. Can I pay each month early so in reality im paying 12 payments a year instead of 4. Obviously at the end of the 3rd month I will be submitting the return and paying what ever is outstanding.

Has anyone ever had any problems doing this? I dont want to go onto monthly returns as it will be more paperwork and that means more cost.

Savvy_Sue

Wouldn't it be simpler to pay your monthly instalment into the best interest paying account you can find, and get some interest?

Martin's article and the discussion here might be worth a look.

gibbyni

Savvy_Sue wrote: »

Wouldn't it be simpler to pay your monthly instalment into the best interest paying account you can find, and get some interest?

Martin's article and the discussion here might be worth a look.

I had considered that but for the sake of 4-5 quid a month interest I would rather know the VAT man is getting paid

Savvy_Sue

I don't know the answer, I know next to nothing about VAT, but if you find you can then I strongly recommend that you make sure the right references are on any payments!

I say this after spending the best part of a year trying to get an overpayment recognised and carried forward from the PAYE / NI section.

It was made more complicated than it need have been because we managed to send off a couple of payments without being aware that HMRC wanted us to add a YYMM reference to all payments. And we sent one payment early, so it got credited to the wrong month, and then they thought we owed money the next month. And two payments landed in their suspense account, and only one came out again, and despite me being able to tell them the exact date, the exact amount, the exact (albeit incorrect!) reference used, plus the account it had come from and gone to - indeed practically everything except my bra size it seemed - no-one seemed able to 'see' that payment!

So, IF you can do this, you'll need to make sure that a payment made in August is flagged to HMRC for the month it is due - with PAYE April is month 1, so any payments relating to April have have 1101 added to the payment reference.

I'd give them a ring and ask, TBH!

gibbyni

Yea Sue thats my worry tried calling a few times just keep getting the were busy message and to call back. I usualy pay through the billpayments system and it asked for the Vat Number year and month of the payment so at least I will have good record of what I have paid them.

Thanks anyway

Ed1982

There is an annual accounting scheme for VAT whereby you submit one return at the year end. However, preceding this you must make either 9 monthly payments or 3 quarterly payments with a final balancing payment/repayment on submission of the return.

Turnover must be under 1.35mil.

Search for the HMRC webby for details.

paulwf

There is the Annual Accounting Scheme with monthly payments and a yearly return - they are using your estimated turnover based on the previous year though so it isn't exactly what you were looking for.

Most business accounts can have a savings account tacked on, you could do your best to move the money into that and make sure you don't spend it!

Edit - Ed beat me to it!

smartpicture

I've paid lump sums in advance before, it was fine, although they did keep writing to me saying I was in credit and asking why and whether I wanted it refunded.