Commentary

V7.205 Cash accounting scheme—voluntary withdrawal

Part V7 Tax planning
Part V7 Tax planning | Commentary

V7.205 Cash accounting scheme—voluntary withdrawal

Part V7 Tax planning | Commentary

V7.205 Cash accounting scheme—voluntary withdrawal

A business is entitled to withdraw from using the scheme at the end of any VAT period; there are a number of commercial reasons why it might make this decision, for example:

  1.  

    •     change in mixture of goods being sold – if a business that previously sold all standard rated items suddenly changes its activity so that the majority of sales are zero-rated, then the benefits of using the cash accounting scheme could be eroded. This is because the benefits in delaying payment of output tax will not be relevant if sales are mainly zero-rated

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