Andrew Needham looks at how to delay the payment of output tax and improve cashflow.
The ‘tax point’ rules state that a business must account for VAT on its sales at the earliest of the supply of goods or services, the receipt of payment or the issue of a tax invoice.
Businesses can postpone the payment of VAT until they receive payment by using the cash accounting scheme, but this is only open to businesses with turnover of less than £1,350,000.
There are other ways of postponing the payment of output tax.
Postponing tax points
Where certain types of services or building works are supplied, it is possible to quite legally postpone the payment of output VAT until payment is received by issuing the correct paperwork. What a
