What is Cash Basis VAT?
VAT is calculated using the payment date, not the invoice date. You only pay VAT when your customers pay you, and you only reclaim VAT when you pay your suppliers.
How does Float calculate VAT?
We calculate VAT by looking at your forecasted cash movement, not the dates on invoices or bills. Here’s how it works:
We track budget dates to find actual VAT.
You choose the VAT method: Quick, Worst Case, or Advanced.
Setting your VAT quarters (UK)
Float supports all three standard HMRC VAT quarter groupings. You’ll be able to select your quarter group when setting up your account or editing VAT settings.
Here are the common quarter endings:
Quarter Months | Return Due |
Mar, Jun, Sep, Dec | 7th of the second following month |
Apr, Jul, Oct, Jan | 7th of the second following month |
Feb, May, Aug, Nov | 7th of the second following month |
💡 Note: If you file VAT monthly, Float will automatically detect this from your accounting platform and set it as your default VAT frequency.
Forecasting Options
Float provides three levels of VAT forecasting:
Quick
Automatically applies a default VAT % that you set to all income and costs budgets.
Quick setup, low maintenance.
Worst Case
Assumes all cash in is VATable at the standard rate (20%) and doesn't include any reclaims from costs.
Good for risk-averse or worst case forecasts as this option is likely to overestimate VAT.
Advanced
Allows custom VAT rates and %'s of accounting categories.
Matches your actual VAT setup for better accuracy and precision, but requires more setup time.
Can I switch VAT forecasting options later?
Can I switch VAT forecasting options later?
Yes! You can change your VAT forecast method in settings at any time.
What if I pay my VAT by Direct Debit
What if I pay my VAT by Direct Debit
When setting up VAT in Float, there’s a checkbox in the settings to indicate if you pay by Direct Debit. If selected, Float will automatically add 3 extra days to your VAT payment date to account for HMRC’s Direct Debit processing time.
Can I forecast monthly VAT returns?
Can I forecast monthly VAT returns?
Absolutely - both monthly and quarterly VAT periods are supported. We will automatically detect this from your accounting platform and set it as your default VAT frequency.
What if I’m not VAT registered?
What if I’m not VAT registered?
Float will exclude VAT forecasting.