Cash Accounting VAT Scheme That Protects Your Cash Flow
Paying VAT on invoices your customers have not paid yet puts unnecessary pressure on your cash flow. ABM Chartered Accountants helps you switch to the Cash Accounting VAT Scheme so you only pay HMRC when the money actually arrives.
Only Pay VAT When You Get Paid
Under the Cash Accounting VAT Scheme, you account for VAT based on when payments are received and made, not when invoices are issued. This means you do not pay VAT to HMRC on sales until your customer actually pays you. ABM Chartered Accountants sets up and manages the scheme for you.
Our ICAEW and ACCA qualified accountants check whether cash accounting is right for your business, handle the switch from standard accounting, and prepare your quarterly returns on a cash basis through MTD-compatible software. If your circumstances change, we advise on the best time to move to another scheme.
What Our Cash Accounting Service Covers
From checking your eligibility to filing your cash-based returns, here is how ABM Chartered Accountants manages the Cash Accounting Scheme to keep your VAT and cash flow aligned.
Eligibility Check
Confirming your business meets the entry conditions for the Cash Accounting Scheme with HMRC.
Scheme Setup
Switching your VAT accounting to a cash basis and adjusting your records and software accordingly.
Cash-Based Returns
Preparing and filing quarterly VAT returns based on payments received and made, not invoice dates.
Bad Debt Protection
Ensuring you only pay VAT to HMRC on income you have actually received from your customers.
Threshold Monitoring
Tracking your taxable turnover to make sure you remain within the scheme exit threshold limits.
Scheme Comparison
Comparing cash accounting against standard or flat rate VAT to find the best option for you.
Better Cash Flow and Built-In Bad Debt Protection
Under standard VAT accounting, you owe HMRC the moment you issue an invoice, whether your customer has paid or not. For businesses that deal with late payers, this creates a real cash flow problem. The Cash Accounting Scheme removes that pressure by aligning your VAT liability with actual payments received.
The scheme also provides automatic bad debt protection. If a customer never pays, you never owe VAT on that sale. There is no need to make a separate bad debt relief claim to HMRC. ABM Chartered Accountants makes sure these advantages work properly in your returns every quarter.
Cash Accounting VAT Support for Businesses Across the UK
Based in Canary Wharf, London, ABM Chartered Accountants manages the Cash Accounting VAT Scheme for businesses throughout the UK. Our cloud-based process keeps your VAT aligned with your cash flow.
Cash Accounting for Businesses With Late-Paying Clients
We manage cash accounting VAT for businesses in construction, professional services, consulting, creative industries, retail, hospitality, and trades. If late payments affect your cash flow, this scheme can help.
Why Businesses Choose ABM for Cash Accounting
Chartered VAT Knowledge
ICAEW and ACCA qualified with cash accounting expertise.
Cash Flow Protected
VAT only paid when customers actually pay you.
Right Scheme Always
We recommend switching if another scheme suits better.
How We Work
Initial Consultation
Set Up and Onboard
Ongoing Support
We provide regular reviews and proactive advice to keep your finances optimised and HMRC-compliant.
Get in Touch Today
Whether you need help with your tax return, payroll, VAT, or business advisory, our qualified UK accountants are ready to provide clear, practical guidance for your specific needs.
Book a Consultation
Fill in the form below and one of our expert accountants will contact you promptly to discuss your accounting and tax requirements.
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Frequently Asked Questions
Here are answers to the cash accounting VAT questions we hear most often. Contact our team for guidance.
What is the Cash Accounting VAT Scheme?
The Cash Accounting Scheme lets you account for VAT based on when you receive and make payments, rather than when you issue or receive invoices. This means you do not owe HMRC VAT on sales your customers have not yet paid for.
Who can join the Cash Accounting Scheme?
You can join if your expected taxable turnover for the next 12 months is 1.35 million pounds or less. You must leave the scheme if your taxable turnover exceeds 1.6 million pounds. ABM Chartered Accountants checks your eligibility and manages the switch.
How does it help with bad debts?
Under cash accounting, you only pay VAT to HMRC on income you actually receive. If a customer never pays an invoice, no VAT is due on that sale. This provides built-in bad debt protection without the need for a separate claim.
Can I use cash accounting with the Flat Rate Scheme?
No. You cannot use the Cash Accounting Scheme alongside the Flat Rate Scheme, as the Flat Rate Scheme has its own built-in cash-based method. ABM Chartered Accountants compares both options and advises which one is better suited to your business.
What transactions are excluded from cash accounting?
Certain transactions must be accounted for on an invoice basis even under the scheme. These include goods bought or sold under hire purchase, conditional sale, or credit sale agreements, and goods imported or acquired from outside the UK.
How much do your cash accounting services cost?
Fees depend on the volume of your transactions and the frequency of your VAT returns. We offer transparent, fixed quarterly pricing with no hidden charges. Contact ABM Chartered Accountants for a quote tailored to your specific needs.