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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.