VAT - Special schemes

Recently added Tips & Advice


Annual accounting - improve cash flow!

HMRC has confirmed that the three-month VAT payment deferral period will also apply to users of the annual accounting scheme. What can you do to maximise cash-flow savings in these difficult times?
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FLAT RATE SCHEME - 09.04.2020

Claiming VAT that you pay on capital expenditure

The VAT legislation allows flat rate scheme users to claim input tax on capital expenditure in some cases. In what circumstances is a claim permitted, and how do you go about making it?
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What happens if you go over the exit threshold?

One of our subscribers uses the cash accounting scheme due to its cash flow advantages. They exceeded the scheme’s exit threshold at the end of the last period due to the sale of an asset that was subject to VAT. Can they remain in the scheme?
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VAT CASES - 03.02.2020

HMRC correct to block retrospective flat rate scheme registration

The case. Holy Cow! Ice Cream Co Ltd (HC) applied to join the flat rate scheme (FRS) in August 2017, asking for the application date to be backdated to the VAT period starting 1 January 2017. HMRC refused because the March and June 2017 returns had already been submitted, so it was not possible for the time-saving benefits of the scheme to be enjoyed for these periods. HMRC allowed a start date of 1 July 2017. ...
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RETAIL SCHEME - 03.02.2020

Can sales to account customers be excluded?

Q. My shop trades as a builder’s merchant and we account for VAT by using a point of sale retail scheme based on our daily gross takings figures. We have a number of account customers who buy goods from the shop but don’t pay until 30 or 60 days later. We include the sale in the till when it is made but can we delay paying VAT until the customer settles their account? This would improve our cash flow, but also means we are not paying VAT in the event of a potential bad debt. ...
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Is advance invoicing a problem?

Q. Our business uses the cash accounting scheme. We want to sublet part of our factory premises to a tenant, charging VAT on the rent. We will raise a sales invoice to the tenant on 25 March each year, showing the total rent due for the twelve-month period starting on 1 April thereafter. The tenant will pay the rent on a monthly basis throughout the year, and we will account for output tax on each payment as it is made. Does this arrangement cause a problem with the cash accounting scheme? ...
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