What is a benefit of the annual accounting scheme?

The advantage of the annual accounting scheme lies in its ability to simplify value-added tax (VAT) processes for businesses. By allowing companies to make fewer VAT returns—typically just one annual return—this scheme reduces the administrative burden associated with managing multiple submissions throughout the year. This streamlined approach can result in lower compliance costs and less frequent paperwork, making it easier for businesses to keep track of their VAT obligations.

Conversely, options that suggest multiple quarterly payments or the necessity for all businesses to join do not hold true for the annual accounting scheme. This scheme is specifically designed as an option for certain businesses rather than a mandatory requirement. Additionally, the notion of requiring larger VAT payments at once contradicts the nature of the scheme; while it may require a single, larger payment at the end of the year, this can be managed through payments on account throughout the year, further aiding in cash flow management for businesses.