How often do most businesses file VAT returns in the UK?

Most businesses in the UK file VAT returns quarterly because this frequency strikes a balance between administrative burdens and cash flow management. Filing VAT returns quarterly allows businesses to report their VAT liability and claim any VAT refunds they are owed on a regular basis, providing a more manageable approach for both larger entities that have higher turnover and smaller businesses that might find it difficult to keep up with more frequent filings.

While some small businesses may qualify to use the annual scheme, which allows them to file VAT returns annually, this is not the standard approach for most businesses. Monthly filings are generally reserved for specific circumstances, such as businesses with a high turnover or those required to submit returns more frequently by HM Revenue and Customs (HMRC). The bimonthly filing option is not commonly utilized in the UK VAT system. Hence, quarterly filings represent the most common practice, aligning with the compliance requirements and operational needs of a wide range of businesses.