Q. I’ve decided that the cash accounting scheme isn’t working for my business anymore. I’m intending to revert to standard VAT accounting from the start of the next VAT period. Do I need to notify HMRC or take any special measures?
A: You don’t need to inform HMRC, but you do need to take care to ensure you don’t miss any sales or purchase invoices during the switch. As you will be used to accounting for payments and receipts as and when they are made, there is a risk that invoices raised before the change date may be overlooked. You need to account for VAT on invoices issued or received and make good any net unpaid VAT to HMRC. However, you may be able to opt to spread any payment over six months. See VAT Notice 731 for further details.
