Treatment of Applications: When can an eligible business start using the FRS?
A business can start using the scheme from its Effective Date of Registration, or any later date agreed with HMRC. In most cases the start date will be the first day of the accounting period after the application is received. A start date of the first day of a VAT accounting period should normally be agreed, as this will make it easier for the business to move from one method of accounting to another and assist HMRC assurance activity.
You can be flexible when agreeing a prospective start date, but should not allow a start date of 29 February.
Request to start using the scheme in the middle of a period
Requests to start (or end) use of the scheme in the middle of a VAT period can be granted, unless there are grounds for refusal under “protection of the revenue”. However, you must make clear to the business that switching accounting methods in the middle of a period will require it to perform two calculations for its first VAT return on the scheme.
Request for retrospective start date