Cash accounting scheme -VAT

Question 1

definition

Answer 1

VAT is accounted for on cash payments and receipts

Question 2

conditions (3)

Answer 2

• VAT returns and payments are up to date
• Turnover is <£1,350,000
• Must leave scheme is turnover exceeds £1,600,000

Question 3

Ads (2)

Answer 3

• automatic debt relief

- Don’t pay output tax until we receive payment from customer

Question 4

Disads (1)

Answer 4

• If we have long credit terms with our supplier, it can delay our input tax recovery.