ÀÏ˾»úÎçÒ¹¸£Àû

Cash basis ― overview


Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance

Cash basis ― overview


Produced by a Tolley Owner-Managed Businesses expert
Owner-Managed Businesses
Guidance
imgtext

This guidance note sets out the principles of using cash basis accounting for unincorporated businesses. Cash basis is a simplified form of accounting and it is intended to make the calculation of trading profits easier by accounting for income and expenditure based on money received from customers and money paid to suppliers.

Cash basis for trading businesses from 2024/25

Finance Act 2024, introduces an expansion of the cash basis for self-employed taxpayers including those in partnerships from the tax year 2024/25. The changes do not apply for property businesses, companies or those entities already excluded from the current cash basis regime.

Prior to 2024/25 the default method for calculating profits of trading businesses was the accruals basis and in order to use the simpler cash basis businesses had to opt in. The changes make the cash basis the default method of calculating profits and businesses have to opt to use the accrual basis instead. The election has effect for the tax year for which it is made and for any subsequent tax year.

Before the changes in

Continue reading the full document
To gain access to additional expert tax guidance, workflow tools, generative tax AI, and tax research, register for a free trial of Tolley+â„¢
TAKE A FREE TRIAL NOW
Powered by
  • 22 Apr 2025 06:20

Home/ Tolley Tax Guidance/ Owner-Managed Businesses / Calculating trading profit and loss

Popular Articles

Corporation Tax

Group relief for carried-forward losses

Group relief for carried-forward lossesThis guidance note examines in detail the relief available to groups for carried-forward losses. The scope excludes the treatment of specialist businesses such as banks, insurance companies and oil and gas companies.From 1 April 2017, companies can surrender

14 Jul 2020 11:50 | Produced by Tolley Read more Read more
Corporation Tax

Taxation of loan relationships

Taxation of loan relationshipsThe vast majority of companies will have loan relationships and so will need to consider how they are taxed under the loan relationship rules. There are also specific provisions dealing with relevant non-lending relationships and other deemed loan relationships.

14 Jul 2020 13:48 | Produced by Tolley Read more Read more
Corporation Tax

Research and development (R&D) relief ― overview

Research and development (R&D) relief ― overviewThis guidance note provides an overview of the research and development (R&D) tax reliefs for companies.See the Research and development tax relief summary diagram which summarises the R&D tax relief.See also Simon’s Taxes D1.401.For a factsheet which

14 Jul 2020 12:22 | Produced by Tolley in association with Will Sweeney Read more Read more