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HMRC internal manual

VAT Annual Accounting Scheme

Operating the scheme: Use of annual accounting with the flat rate scheme

Businesses with an actual or estimated annual liability up to £150,000 can use the annual accounting scheme and flat rate scheme together. There is a joint application form in Notice 732 Annual Accounting.

If using the annual accounting and flat rate scheme together, the business must follow the guidance in Notice 733 Flat rate Scheme for Small Businesses. Notice 733 also provides guidance for interacting with the cash accounting and retail schemes.