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VAT Cash Timing · HMRC guidance reviewed 6 August 2026

VAT on unpaid invoices under cash accounting

See how unpaid customer invoices can defer output VAT while supplier-payment timing affects input VAT.

Decision boundary

Output VAT generally follows customer payment under the scheme, but input VAT recovery also waits until the supplier is paid. Both sides belong in the comparison.

Evidence to check

Compare this VAT period

Official source

HMRC VAT Notice 731 sections 4 and 8

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.Cash accounting vs invoice accounting for VATCompare invoice VAT with VAT attached to payments actually received and made in the period.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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