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HMRC internal manual

Business Income Manual

From
HM Revenue & Customs
Updated
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Tax and accountancy: timing of income and expenditure

There are some specific statutory rules governing the timing of relief for some specific expenditure and there is some case law which gives guidance on recognising income. Guidance on income recognition under GAAP is in section 23 of FRS102, Application Note G to FRS5 and IAS18. The general approach is similar to the case law approach.

Income is generally earned when goods are provided or services are performed. The timing of issuing bills, invoicing, or receiving payments does not determine when income should be recognised. The guidance at BIM31105 and BIM31110 looks at circumstances when goods or services are not provided.

BIM31090 Tax and accountancy: timing of receipts and expenditure: general principles derived from case law
   
BIM31095 Tax and accountancy: timing of receipts and expenditure: accountancy practice and case law developments
BIM31100 Tax and accountancy: timing of receipts and expenditure: anticipation of loss
BIM31105 Tax and accountancy: when to recognise profits: source is important
BIM31110 Tax and accountancy: recognition of deposits and compensation
BIM31115 Tax and accountancy: timing of income and expenditure: GAAP