- HMRC has updated its payments on account (POA) guidance for VAT.
- POA are advance payments towards a business’s VAT bill and are mandatory.
- Businesses make interim payments at the end of months two and three for each return quarter.
- POA are calculated based on a business’s annual VAT liability.
- The POA cycle starts in the first quarter after a business exceeds the £2.3 million threshold.
- POA are due on the last working day of the second and third months of every VAT quarter.
- Late payments of POA will be subject to late payment interest.
- Balancing payments are due with the VAT return and must be paid by the last working day of the month.
- Late payments of balancing payments may result in immediate action, late payment interest, and late payment penalties.
- Businesses can be removed from the POA arrangement if their VAT liability falls below £2.3 million.
- Businesses have the option to make VAT returns and payments monthly instead of quarterly.
- It is important to recognize the POA limit and make payments on time to avoid cash flow issues.
Source: marcusward.co
Note that this post was (partially) written with the help of AI. It is always useful to review the original source material, and where needed to obtain (local) advice from a specialist.
