The VAT cash accounting scheme is a way of calculating your VAT liability based only on the funds you receive against the actual payments you make.
Therefore many businesses find this a lot better for cash flow as they are only paying the VAT on what they have received rather than invoices raised which may take weeks or months before they are paid.
There are strict criteria however put in place by HM Customs in order to be eligible for the scheme, the main ones being your business must have a taxable turnover of less than £1.35m, have no outstanding returns at the time of applying, you must have been convicted of any VAT offences with late filing or payment within the previous year and have no VAT liability arrears on your account.
There is obviously a real need to keep up to date records for cash accounting but with Making Tax Digital legislation now in place computerised software used correctly and balanced accordingly will more than suffice to keep your cash accounting scheme in order and will be able to tell you at any point what VAT is owed.
If your business is already registered for VAT and you now wish to apply for the scheme you may use the scheme from the next VAT period once accepted. Please note though if changing over you must avoid accounting for VAT twice on any supplies made, so if you have claimed back already on the invoice you cannot then claim again when the invoice is paid.
If you need any further advice regarding VAT cash accounting schemes it would be best discussed with an accountant who can advise you accordingly and bespoke any VAT scheme exactly to the running of your business.