Cash Accounting

In the Cash Accounting Scheme, you only pay VAT to HM Customs & Excise after you have received it from your customer. If you are a small business giving credit, and your customers take a long time to pay you, then you may be interested in cash accounting. Ask your accountant for advice.

VAT is recorded on the basis of cash receipts and cash payments. Suitable paper accounting systems are the Evrite 707 and the analysed cash book which you can find in a stationer such as WH Smith, and the paper and spreadsheet system produced by David Porthouse & Co.

If you cash-account for receipts, then you must also cash-account for payments on the same basis, to make it fair.