VAT Return

In E-conomic you have the option to select the VAT scheme prior to running your VAT Return.

Here you can enter the 'From' and 'To' date for your VAT return. Select your VAT scheme from the drop down list, then click OK.

The Standard VAT scheme is based on calculating the VAT on sales invoices sent out and purchase invoices received in irrespective of whether they have been paid.

For more information about the Standard VAT scheme click here

When using the Cash Accounting Scheme, you do not need to pay VAT until your customer has paid you. But you also cannot reclaim VAT on your purchases until you have paid for them.

Cash accounting can be beneficial for your cash flow especially if your customers are slow to pay. It is even more useful if you have bad debts. Under standard accounting for VAT, you have to pay the VAT on the debt even if you never receive the payment from your customer. Using the Cash Accounting Scheme, you do not pay the VAT if your customer never pays you.

The Cash Accounting Scheme may not be for you if you regularly reclaim more VAT than you pay, or if you buy a lot of goods and services on credit.

For more informatin about the Cash Accounting VAT scheme click here

If your VAT taxable turnover is less than £150,000, you could simplify your VAT accounting by calculating your VAT payments as a percentage of your total VAT-inclusive turnover. Although you cannot reclaim VAT on purchases - it is taken into account in calculating the flat rate percentage - the Flat Rate Scheme can reduce the time that you need to spend on accounting for and working out your VAT.

For more information about the Flat Rate VAT scheme Click here