Cash basis is a way of working out your income and expenses for your Self Assessment tax return.
You can use cash basis if you:
- are a small self-employed business eg sole traders and partnerships
- have an income of £79,000 or less a year (this is the threshold when you have to register for VAT)
You can start using cash basis from the 2013 to 2014 tax year.
Limited companies and limited liability partnerships can’t use cash basis.