When you leave the cash accounting scheme, you may choose either to:
- account for all your outstanding VAT due in the period in which you stop using the scheme. This may be simpler but could have a serious effect on your cash flow if the amounts of the VAT on your debtors is high
- or opt for a further six months in which to account for the outstanding VAT.
Please note that you cannot opt for a further six months in which to account for the outstanding VAT if:
- HMRC has withdrawn use of the scheme from you, or
- the value of your taxable supplies has exceeded £1,600,000 and the value of your supplies made in the previous three months totalled more than £1,350,000
If you want to make sure your business is running as tax efficiently as possible and making use of all the reliefs and allowances available to it, please feel free to contact your local TaxAssist Accountant for some advice.
By Jo Nockels
Disclaimer: The information provided is based on current guidance (at date of publication) from HMRC and may be subject to change. Any advice shared here is intended to inform rather than advise. Taxpayer's circumstances do vary and if you feel that the information provided is beneficial it is important that you contact us before implementation. If you take, or do not take action as a result of reading this information, before receiving our written endorsement, we will accept no responsibility for any financial loss incurred.