What is the turnover threshold for joining the annual accounting scheme?

The correct turnover threshold for joining the annual accounting scheme is £1,350,000. This threshold is set by HM Revenue and Customs (HMRC) and establishes the upper limit of taxable turnover for businesses that wish to opt into this scheme. The annual accounting scheme is designed to simplify the VAT reporting process for small to medium-sized enterprises.

Businesses with a turnover below the specified threshold are encouraged to join the scheme because it allows for more streamlined VAT returns—typically once a year rather than quarterly—and usually entails making advance payments towards the VAT liability. By understanding this threshold, businesses can make informed decisions about their VAT management and compliance, alleviating some of the administrative burdens associated with more frequent reporting requirements.

The other options listed do not reflect the current threshold and therefore would not provide the correct framework for businesses looking to participate in the annual accounting scheme.