About 35,000 recruitment and HR firms in the UK are now eligible for simpler VAT - only filing a single annual return, and paying their tax bill monthly.

From 1 April, businesses with a turnover of up to £1.35m are able to join the Annual Accounting VAT simplification scheme.

“We know a lot of businesses find a quarterly VAT bill difficult to mange in terms of cashflow… adopting the Annual Accounting Scheme is also cheaper for businesses - we estimate that completing only one return a year instead of four will save businesses more than £100 annually,” said John Brandwood of HM Revenue & Customs.

Under the previous system, only businesses with a turnover of up to £660,000 could join the scheme.