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What is VAT Cash Accounting Scheme?

Pay VAT when Customers pay

Reclaim VAT when you pay suppliers

Good for Cashflow

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What is VAT cash accounting scheme
VAT Cash accounting scheme
VAT Cash

How does Cash accounting works? for VAT

The Cash Accounting Scheme is ideal for businesses that experience cash flow issues. Instead of accounting for VAT on invoices issued and received, you only pay VAT to HMRC when your customers have paid you.

Similarly, you can reclaim VAT on purchases when you have settled the supplier’s invoice. This scheme helps align your VAT payments with your cash flow.

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Eligibility

Who can use Cash Accounting for VAT?

This scheme cannot be used:

  • In conjunction with Flat rate vat scheme
  • If you are not up to date with VAT returns
  • If you have committed a VAT offence
  • If payment terms of VAT invoice is more than 6 months.
  • VAT invoice is raised in advance

 

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