Basis of VAT accounting – Invoice or Cash Basis
Q: Basis of VAT accounting – Invoice or Cash Basis
Happy new year lads,
Question in relation to VAT accounting and preparing VAT3 returns.
As you know, companies can opt for a cash receipt basis rather than when the invoice is issued. Currently, my BulletHq profile appears to be setup for a invoice basis rather than cash received.
Is there a way to change that ?
Thanks
Richie
I understand where you're coming from with the visibility of the options.
I had an invoice entered as received but not paid from NCI on Sept 30th - it is showing up under the 'Due' column on the Money Out screen as expected.
However when I view the VAT3 return for Oct / Nov - it is listed under the payments column and showing a VAT paid of €1150 - so hence my question on the invoice vs cash basis setting.
Any help appreciated.
Richie
You've come across the quirk in the Irish tax system for the cash basis of VAT!
For the cash basis, you only owe the VAT for invoices you get paid for. However, for bills, you can claim the VAT back on them immediately, whether you've paid them or not! This is better for cashflow, which is why the revenue commissioners all you to immediately recover VAT on bills rather than only when they're paid.
John
Cheers
Richie