Hi,
I guess there is nothing to stop a client switching from VAT cash accounting for the 29/02 Return to maximise the deferred liability (Coronavirus) and switching back afterwards if it's to their advantange in the next quarter - correct?
As long as they are aware that this will be payable 2020/21 it seems sensible.
Many thanks
Replies (4)
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Why would you do that, though, when collection of the tax is being deferred ?
Easier to cancel your direct debit.
Take your point but the success or otherwise depends to a large extent on things we don't yet know. Like the terms for settlement of these deferred debts and whether the scheme will be extended to the following quarter.
It's only (so far) 'this' quarter's VAT that is going to be deferred. I haven't worked it through yet, but changing to invoice basis to bring VAT into this quarter that would otherwise have been recognised in the next under cash accounting might be beneficial from a cash flow perspective.