VAT - Cash Accounting Scheme

Question 1

How does the cash accounting scheme work?

Answer 1

VAT is accounted for based on cash receipts and payments, rather than using the dates of invoices issued and received

Question 2

What does the tax point become?

Answer 2

The time of receipt or payment

Question 3

What is the main condition for joining the cash accounting scheme?

Answer 3

Turnover can’t be more than £1.35 million

Question 4

What is the condition for leaving the cash accounting scheme?

Answer 4

Turnover is over £1.6 million

Question 5

What are the other two conditions that need to be met to join the cash accounting scheme?

Answer 5

• VAT returns and payments up to date
• no convictions for VAT offences or penalties in last 12 months