Summer 2007 Newsletter Content Reverse Charges Beyond The Grave Director's Two Hats IHT Plan Fails VAT And Cash Amnesty International An Inspector Calls Losing A Bet Caring Doctors TAAR Brush Made To Be Broken Flat VAT Safe Deposit Tax On Gas Working Late Composite Companies Excuses, Excuses

VAT And Cash The cash accounting scheme is supposed to help small VAT-registered businesses with their cash flow. If you are using the "normal" rules of VAT, you are supposed to pay Customs the VAT included in your sales for the quarter - even if your debtors haven't paid you by the time you have to put the VAT return in. Under cash accounting, you only have to give the money to Customs after your own customers have paid you. There is a downside - you can only claim back the VAT on your expenses once you have actually paid them, instead of just when you are invoiced. So if you pay your suppliers more slowly than you collect on your sales, you are better off not using cash accounting. A retailer normally does this. From 1 April 2007, the maximum turnover for entering the scheme has more than doubled from £660,000 to £1.35m. The government reckon that another 50,000 businesses will qualify for the scheme as a result. If cash accounting sounds like a good idea to you - whether you now qualify for the first time or you did before - we will be happy to help you with the rules.