Commentary

V7.195 Conditions for joining the cash accounting scheme

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.195 Conditions for joining the cash accounting scheme

Part V7 Tax planning | Commentary

V7.195 Conditions for joining the cash accounting scheme

Unlike many special schemes, there is no requirement to notify HMRC in advance that a business intends to adopt cash accounting. If a business is eligible to use the scheme, then it can choose to do so at the beginning of any VAT accounting period.

However, there are a number of important conditions that must be met before the decision to adopt the scheme can be made, as follows.

  1.  

    •     Turnover limit – the cash accounting scheme can only be used by a small business with an expected annual taxable turnover (VAT exclusive)

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