VCAS1150 | Cash accounting scheme: Introduction: Law

Section 25(1) and paragraph 2(7) of Schedule 11 of the VAT Act 1994 provide the power for HMRC to make Regulations to introduce a Cash Accounting scheme.

The VAT Regulations 1995 Part VIII (Regulations 56-65) set out the Cash Accounting scheme rules. Regulation 57 allows HMRC to publish a Notice which may contain additional rules to those laid down in Regulations 56-65.

Regulation 57 describes the scheme thus:

A taxable person may, subject to this Part and to such conditions as are described in a notice published by the Commissioners, account for VAT in accordance with a scheme (hereinafter referred to in this Part as “the scheme”) by which the operative dates for VAT accounting purposes shall be-

(a) for output tax, the day on which payment or other consideration is received or the date of any cheque, if later; and

(b) for input tax, the date on which payment is made or other consideration is given, or the date of any cheque, if later.