Could Your Business Benefit from Extension of Vat Scheme? – News 174
If your business struggles with VAT or find that paying out VAT affects your cashflow then the extension of a special scheme from 1st April 2007 could help you.
If your business struggles with VAT or find that paying out VAT affects your cashflow then the extension of a special scheme from 1st April 2007 could help you.
The Cash Accounting Scheme (CAS) allows eligible businesses to defer paying their VAT until they have received payment from their customers – as opposed to accounting for and paying VAT when they issue and receive invoices. From 1 April 2007 the threshold for CAS is to be more than doubled from £660,000 to £1.35 million (the expected value of your taxable supplies for the tax year), this will allow more small and medium sized businesses to improve their cashflow.
However, the scheme also means you can only reclaim VAT on your purchases once you have paid your supplier. This means that the scheme will probably not be of benefit to your business if you are paid very quickly by customers or regularly reclaim more VAT than you pay.
