‘Cash basis’ is a way to work out your income and expenses for your Self Assessment tax return, if you’re a sole trader or partner.
If you run a small business, cash basis accounting may suit you better than traditional accounting. This is because you only need to declare money when it comes in and out of your business. At the end of the tax year, you will only pay Income Tax on money received in your accounting period.
Cash basis probably will not suit you if you:
You can use cash basis if you:
If you have more than one business, you must use cash basis for all your businesses. The combined turnover from your businesses must be less than £150,000.
Limited companies and limited liability partnerships cannot use cash basis.
There are also some specific types of businesses that cannot use the scheme:
Contact us to see how we can help you with this.
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