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HMRC internal manual

Business Income Manual

Cash basis: contents

This chapter explains the new cash basis introduced in Finance Act 2013. This is a simpler way for small businesses to calculate their taxable income, allowing them to be taxed on the basis of receipts less payments of allowable expenses. Profits of a trade, profession or vocation can be calculated on the cash basis. For the rest of this chapter, any references to trade include professions and vocations.

This chapter also explains the alternative basis for barristers.

Eligible businesses can start using the cash basis from April 2013.

  1. BIM70005
    Overview
  2. BIM70010
    Eligibility
  3. BIM70011
    Eligibility: partnerships
  4. BIM70015
    Receipts: overview
  5. BIM70020
    Receipts: capital receipts
  6. BIM70025
    Receipts: value of trading stock on cessation of trade, value of work in progress on cessation of profession or vocation
  7. BIM70030
    Expenses: overview
  8. BIM70035
    Expenses: capital expenditure
  9. BIM70036
    Expenses: capital expenditure: Land
  10. BIM70037
    Expenses: capital expenditure: Intangible Assets
  11. BIM70038
    Expenses: capital expenditure: Financial Assets
  12. BIM70039
    Expenses: capital expenditure: Transitional arrangements 2017- 2018
  13. BIM70040
    Expenses: interest payments and incidental costs of obtaining finance
  14. BIM70050
    Rules not applied in calculating profits
  15. BIM70055
    Leaving the cash basis
  16. BIM70060
    Transitional adjustments: entering the cash basis: overview
  17. BIM70065
    Transitional adjustments: entering the cash basis: examples: debtors, creditors, stock
  18. BIM70066
    Transitional adjustments: entering the cash basis: examples: accruals and prepayments
  19. BIM70067
    Transitional adjustments: entering the cash basis
  20. BIM70068
    Transitional adjustments: entering the cash basis: examples: successions between connected persons
  21. BIM70069
    Transitional adjustments: entering the cash basis: examples: VAT, finance leasing
  22. BIM70070
    Transitional adjustments: leaving the cash basis: overview
  23. BIM70071
    Transitional adjustments: leaving the cash basis: calculation
  24. BIM70072
    Transitional adjustments: leaving the cash basis: prepayments
  25. BIM70073
    Transitional adjustments: leaving the cash basis: capital expenditure
  26. BIM70075
    Alternative basis: contents