Cash Accounting VAT Scheme

VAT returns are calculated on the tax point date, usually the same as the VAT invoice date for your sales and purchases which means sometimes you can owe VAT on sales invoices that your customers haven't paid you for yet.

The VAT cash accounting scheme instead bases the return on actual payment dates both for your purchases and sales.

Your sales need to less than £1.35 Million, and you can stay in the scheme as long as it remains below £1.6 million.