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HMRC internal manual

VAT Annual Accounting Scheme

Payments: how interim payments are calculated

The level of interim payments is determined by the business’s estimated turnover or the net VAT liability in the previous 12 months, rounded down to the nearest £5.

If the initial period is for 4 months or less, no interim payments will be required.

If a VAT return is received after a central assessment has gone on file or if an officer’s assessment is raised for the period on which interim payments are based, the system will revise the interim payment level automatically. This revision will only take place if the increase to the business’s liability is more than 10%, or the change to the next instalment amount is more than £100.

A letter notifying the business of the change will be issued automatically and a copy will be sent to the AAS team in Grimsby for scanning into Electronic Folder.