Expanding the cash basis
This consultation welcomes views on options to extend the self-employed cash basis, which is a simplified way of calculating taxable profits for Income Tax purposes. The government wants to ensure as many businesses as possible are able to benefit from this simplification.
The consultation will focus on the four following policy proposals, but welcomes other ideas:
- increasing the turnover thresholds for businesses to use the cash basis
- setting the cash basis as the default, with an opt-out for accruals
- increasing the £500 limit on interest deductions in the cash basis
- relaxing restrictions on using relief for losses made in the cash basis
We would like to hear from businesses, particularly self-employed businesses that use or would be eligible for the cash basis, their advisers, representative bodies, software providers, and other interested parties.