VAT Cash TimingFarm 74

VAT Cash Timing · HMRC guidance reviewed 6 August 2026

Cash accounting vs invoice accounting for VAT

Compare invoice VAT with VAT attached to payments actually received and made in the period.

Decision boundary

Cash accounting changes the payment period for output and input VAT. It normally does not change the underlying VAT rate or turn VAT into a saving.

Evidence to check

Net sales and purchases for the same period
The proportion of customer payments actually received
The proportion of supplier payments actually made

Compare this VAT period

Official source

HMRC VAT Notice 731 sections 1 and 4

General information only. HMRC determines scheme eligibility, payment periods, exclusions and transition accounting.

Related guides

VAT Cash Accounting eligibility: £1.35m entry testCheck the VAT-exclusive turnover screen, general conditions and transaction exclusions separately.VAT on unpaid invoices under cash accountingSee how unpaid customer invoices can defer output VAT while supplier-payment timing affects input VAT.30, 60 or 90-day customers: VAT timing boundaryConvert payment-term assumptions into the percentage actually collected inside one VAT period.

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