Commentary

V7.204 Leaving the cash accounting scheme

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.204 Leaving the cash accounting scheme

Part V7 Tax planning | Commentary

V7.204 Leaving the cash accounting scheme

There are three situations which would result in a business withdrawing from the cash accounting scheme:

  1.  

    •     voluntary withdrawal – a business may withdraw from the scheme at the end of any VAT period

  2.  

    •     turnover above the limits of the scheme – if a business expands so that its taxable turnover exceeds £1.6m (excluding VAT) per annum, then it may need to withdraw from the scheme. However, HMRC allow continued use of the scheme in certain circumstances

  3.  

    •     compulsory withdrawal – due to non-compliance with HMRC regulations

If a business

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