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Cash accounting scheme WHEN you pay VAT

Cash accounting scheme WHEN you pay VAT

Hi there,

Just discussing with someone, when you pay on cash accounting scheme for VAT? Do the deadlines for submitting a return change? I.e. do you only pay VAT when a customer pays you, regardless of when that may be?


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02nd Aug 2010 16:22


The deadlines for paying VAT are unchanged ie. the deadline is at the end of the month following the quarter being accounted for (plus an extra week if paying electronically).

It is the amount that you pay that is different under cash accounting. The calculation for sales VAT is basedon customer receipts in the VAT quarter instead of the value of the invoices. Likewise for purchases.

Cash accounting ensures that you only pay over the (sales) VAT to HMRC after your customer has paid you. Under the standard or invoice method you could be paying VAT on an invoice that your customer hasn't paid yet. 

-- Kind regards Andy

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02nd Aug 2010 16:23

Cash means cash

You only account for output VAT on sales when your customers pay you. You only claim input VAT on purchases when you pay your suppliers. This should avoid VAT creating cashflow problems as you only have to pay it over when you have the cash.

In all other aspects (return deadlines, only transactions within the return period are included, etc) it operates the same as non cash accounting.

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