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Setting money aside for VAT without the stress
8 September 2026 · 4 min read
VAT is collected on your customers' behalf, so it was never yours to spend. Here's how to keep it separate as you go.
If you charge VAT, part of every taxable sale belongs to the tax authority. The trouble starts when it sits in the same balance as everything else and gets spent.
Give VAT its own pot
Create a separate pot in your account just for VAT. Move the VAT portion of your sales into it every day or every week, so the money is there when the return is due.
Keep the records as you go
- Show VAT clearly on your invoices.
- Download statements for each period you file.
- Keep receipts for VAT you've paid on your own purchases.
Check the details with your accountant
Which sales are taxable and when you need to register depends on what you sell. A short conversation with an accountant now saves a lot of worry later.
