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May 7, 2021
Question

Are supplies under the Domestic Reverse Charge VAT for CIS automatically entered into VAT returns on the accrual basis even if the returns are set to cash accounting?

  • May 7, 2021
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1 reply

May 7, 2021

Hello Michael-gosnay, 

 

Welcome to the Community page, 

 

 

So it is not automatically, this is the HMRC regulations as RC CIS can only be done on accrual basis. You can look up the RC CIS flowchart on HMRC's website and it even explains it can only be recorded on accrual, here is the link  if you scroll down to specifics in section 11 Cash accounting scheme, you cannot use the VAT  Cash Accounting Scheme for suppliers of services that are subject to the reverse charge.

 

So no you will need to swap the VAT settings within the taxes page to accrual and inform HMRC of your change in accounting method.