One of the positives outcomes from the budget for small business isthat the VAT cash accounting threshold will be increased from €1.25 million to €2 million, but this will only take effect from 1 May 2014. The cash accounting threshold has doubled in the last two years, and this provides a welcome measure of cash flow relief.
Under the normal Invoice Basis for accounting, a traderis liable to account for VAT when an invoice is issued to a customer. Under the Cash Basis (also called the Receipts or Moneys Received Basis) of accounting, a trader is liable to account for VAT when payment is actually received.
Visit http://www.revenue.ie/en/tax/vat/guide/received-basis.html to findout all you need to know on how to move from invoice/sales basis to moneys received basis.
Declan Moore is Audit Manager in OSK.
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