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VAT Rolling turnover

Acceptable methods

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Hi all

A brief question that may have been asked before about the method for calculating rolling turnover for VAT purposes.

When calculating VAT on a rolling 12 month basis, is it an acceptable method to use the value of invoice payments received within that month?

E.g. If a company received payments of £5k in January, to add that into the equation on the rolling turnover calc?

Or is the correct method to calculate the total value of invoices raised in that given month?

Or would either method be acceptable?

Many thanks


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Jason Croke
By Jason Croke
20th Sep 2021 11:22

The taxable turnover is the value of all supplies (sales) made in the month. if we started looking at invoices raised and invoices paid in the month it'd get confusing. Once VAT registered, the business may choose to use cash accounting which shifts the tax point of the supplies made to the date of payment, not date of invoice.

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Replying to Jason Croke:
By lionofludesch
20th Sep 2021 11:42

I agree. It's sales that count. Which, to me, means what would go in proper accruals accounts.

(A bit weird, then, that HMRC keep pushing cash basis options in other areas.)

If you're on the cusp of the threhold, the cash basis could prove to be an own goal. Accruals basis is far more likely to be a smooth line. You only need a big debtor to pay sometimes before, sometimes after the month end and your monthly sales could prove very lumpy.

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By atleastisoundknowledgable...
20th Sep 2021 11:41


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