What is the Standard VAT Accounting Scheme?
Definition: The Standard VAT Accounting Scheme means you pay VAT on your sales whether or not your customer has paid you and can claim VAT on your supplier invoices irrespective of whether you have paid them.
There are several VAT schemes so it’s important to do your research and ensure that you apply the right one for your business, since the alternatives relate to specific trade sectors and turnover.
If you are operating the Standard VAT scheme, then the VAT recorded on your sales invoices will be posted to a VAT control account within your accounting systems chart of accounts. Therefore, it keeps a record of all Sales or Input VAT, as well as records all purchase VAT or Output VAT within the same system.
At the end of each period, you will report on the difference between the VAT which was paid by you and the VAT which was paid to you. If your sales VAT exceeds your purchase VAT you will pay HMRC, and if it's the other way around then you will be repaid by HMRC.