I am bookkeeping for a small company who have historically done their Vat the normal way (ie liable on creation of Sales invoices etc). I think it would be more beneficial for them to go to Cash Accounting. Are we allowed to change, and how do I go about it.
Myself, I prefer, where possible, to obtain Customs & Excise permission first even though some might say that this is not strictly necessary. Barring early payment discounts, payments on account and other distractions, the basic routine should be quite straight-forward.
I can't advise on specific softare, but if you were using a spreadsheet, for example, begin by isolating those sales invoices outstanding at the end of your chosen period. Next, list them at the beginning of the following month and reconcile them when paid, whilst moving ones still outstanding to the next month, and so on, until all the ones you started with were cleared. There. Done, and I bet you thought it was complicated.
I would not do this in the middle of a VAT period and have tended to do this change over at the year end, if for no other reason than tidyness. Also, as C&E will tell you, you must treat purchases/input vat in the same way, ie. claiming the VAT only when paid by yourselves.
Feel free to ask again if you're using some particular software as there will undoubtedly be someone on here who has experience in their finer points.
You should have a read of this page before doing anything:-
...and if you think you can still go ahead, then have a good read of VAT Notice 731. Don't hesitate to ask again if you're not sure and think of reasons why you may need/wish to leave the scheme before going ahead.
Dear Tim, Gosh that was a reply above and beyond the call of duty. Thanks so much for all that info and advice. I will check out those links too. The Client's year end is not till May, so I know I have enough time to research it. All best Henrietta (Gibbs)
You're very welcome. I've spotted an omission though from the end my second paragraph. Hopefully it was obvious but from there on in, you list only the cash received and keep your Sales Day Book elsewhere.
