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HMRC internal manual

VAT Cash Accounting Scheme Manual

From
HM Revenue & Customs
Updated
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Cash accounting scheme: Records and accounts: Receipted VAT invoices

The normal requirements concerning evidence for the deduction of input tax apply to businesses using the cash accounting scheme. VAT Regulations 65(3) and 65(4) also require users of the scheme to obtain particular evidence of payment.

65(3) A person operating the scheme shall obtain and keep for a period of 6 years, or such lesser period as the Commissioners may allow, a receipted and dated VAT invoice from any taxable person to whom he has made a payment in money in respect of a taxable supply, and in such circumstances a taxable person must on request provide such a receipted and dated VAT invoice.

65(4) A person operating the scheme shall keep for a period of 6 years, or such lesser period as the Commissioners may allow, a copy of any receipt which he gives under paragraph (3) above.

“Money” in this Regulation means banknotes or coins. If payment is made by cheque the VAT invoice does not need to be receipted.

The VAT invoice does not need to be separately receipted if the accompanying till receipt or similar receipt states “cash sale” or clearly indicates that cash has been given, for example through an analysis of change given. You should only question non-receipted cash purchase invoices where there is clearly no evidence of cash payment.