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HMRC internal manual

Business Income Manual

From
HM Revenue & Customs
Updated
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Cash basis: rules not applied in calculating profits

In calculating the profits of a trade using the cash basis, certain rules do not apply and some claims and reliefs are not available.

Claims, elections and reliefs not available when using the cash basis

  • Herd basis rules (see BIM55501)
  • Averaging profits of farmers and creative artists (see BIM84050)
  • Compensation for compulsory slaughter of animals (see BIM55180)
  • Relief for unremittable amounts

Special rules not applied in calculating profits on the cash basis

  • Sound recordings (see BIM56200)
  • Certain telecommunication rights (Chapter 9 or Part 2 ITTOIA 2005)
  • Long-funding leases (Chapter 10A of Part 2 ITTOIA 2005)
  • Changes in trading stock (see BIM33630)
  • Disposal and acquisition of know-how (Chapter 14 of Part 2 ITTOIA 2005)
  • Oil activities (Chapter 16A of Part 2 ITTOIA 2005)