VAT - Advantages of Cash Accounting Scheme

Question 1

What is the first advantage of cash accounting schemes?

Answer 1

Businesses selling on credit do not need to pay output VAT to HMRC until they receive payment from customers

Question 2

What is the second advantage of cash accounting schemes?

Answer 2

Gives automatic bad debt relief

Question 3

What is the third advantage of cash accounting schemes?

Answer 3

Can be used with the annual accounting scheme