Cash Accounting Scheme


Usually VAT is payable when an invoice is issued. In contrast, using the Cash Accounting Scheme, you do not need to pay VAT until your customer has paid you. But you also cannot reclaim VAT on your purchases until you have paid for them.

Cash accounting can be beneficial for your cash flow especially if your customers are slow to pay. It is even more useful if you have bad debts. Under standard accounting for VAT, you have to pay the VAT on the debt even if you never receive the payment from your customer. Using the Cash Accounting Scheme, you do not pay the VAT if your customer never pays you.

The Cash Accounting Scheme may not be for you if you regularly reclaim more VAT than you pay, or if you buy a lot of goods and services on credit.

Find out more about the Cash Accounting Scheme.
 

To discuss this further and how it could benefit you, please contact us.

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