Who can use Cash Basis?
You can use cash basis if you:
run a small self-employed business, for example sole trader or partnership
have a turnover of £150,000 or less a year
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.
If you use cash basis and your business grows during the tax year
You can stay in the scheme up to a total business turnover of £300,000 per year. Above that, you’ll need to use traditional accounting for your next tax return.
Who can’t use the scheme?
Limited companies and limited liability partnerships can’t use cash basis.
There are also some specific types of businesses that can’t use the scheme:
farming businesses with a current herd basis election
farming and creative businesses with a section 221 ITTOIA profit averaging election
businesses that have claimed business premises renovation allowance
businesses that carry on a mineral extraction trade
businesses that have claimed research and development allowance
dealers in securities
relief for mineral royalties
ministers of religion
pool betting duty
intermediaries treated as making employment payments
managed service companies
cemeteries and crematoria
If you can’t use cash basis, you’ll need to use traditional accounting to work out your taxable profits.
FOR HELP WITH YOUR SELF ASSESSMENT & CASH BASIS
CONTACT WALSH WEST CCA 7 DAYS A WEEK:
+44 0203 488 7503 / 01992 236 110