One of my clients uses the cash accounting scheme (CAS) and trades as a computer consultant. I have discovered two potential problems when doing the year end accounts.
Firstly he invoices his wife’s chiropodist company for services – not registered for VAT – but she has never paid him because her business is still evolving. The company will pay him eventually but not for at least 12 months. Does this cause a problem with the CAS anti-avoidance legislation?
Secondly he raised an advance sales invoice in December 2022 for the sale of 100 computers to a customer for £120 000 plus VAT which were not supplied until February 2023 when they arrived from China. The customer paid the invoice in January 2023.
Should my client have paid the VAT on his December 2022 return rather than March 2023 ie based on the invoice rather than...
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