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Changing VAT accounting basis from invoice to cash - implications for previous invoicing and VAT return?
Howdy, ive just realised i've had FAC set up to invoice not cash accounting. I signed up for the tool just before my last VAT return, so i've already paid some VAT on invoices ive not yet been paid for, and all new invoices since the last VAT return have been raised with the invoice level VAT setting, how will changing the setting mid month and mid VAT period affect previous entries and VAT return?
Please let me know if anything needs clarifying and many thanks for your help.
Please let me know if anything needs clarifying and many thanks for your help.
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Inappropriate?Jammers,
You should leave the VAT Return you've already sent on 'Invoice' accounting, but change the current one to 'Cash'. The HMRC are OK with you just deciding to change over yourself (give their helpline a call if you're unsure).
FreeAgent will intelligently handle the VAT liability from invoices issued or money received under each basis (i.e it knows that you've already incurred a VAT liability from the older invoice and not raise it again under the new Cash basis when you get paid).
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