Commentary

V7.200 Cash accounting scheme—payments in kind and part exchange transactions

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.200 Cash accounting scheme—payments in kind and part exchange transactions

Part V7 Tax planning | Commentary

V7.200 Cash accounting scheme—payments in kind and part exchange transactions

It is possible that a business could receive part or full payment for its supplies as a non-monetary consideration, for example, a part exchange transaction. In such cases, output tax is due on the full value of the supply. For a business using the cash accounting scheme, this principle still applies, and the 'payment' date is deemed to be when the non-monetary consideration is received. See Example 5.

Example 5

DEF Ltd sells tractors and is VAT registered using the cash accounting scheme. It sells a tractor to Mr Smith for £10,000

To continue reading
View the latest version of this document, as well as thousands of others like it, sign in to TolleyLibrary or register for a free trial