25 July 2007

Changes to the cash accounting rules, increasing the turnover threshold from £660,000 to £1.35 million will mean that may smaller businesses may switch to cash accounting and enjoy a significant cashflow advantage.

The change to cash accounting means that you pay VAT based on what you receive and pay out on a ‘cash basis’ not on the basis of sales invoices raised and supplier invoices received.

Both in the month of change and ongoing following the change you only pay VAT on what you receive, not invoices raised. While we have changed all our own clients who qualify to the cash basis, we continue to hear of many small businesses that have yet to take advantage of this simple but effective change.

The rules changed on 1st April 2007, following the budget.

So act today to improve your cashflow.

If you want more information contact us or visit on our website at www.laytonlee.co.uk