BIM70000 - Cash basis: contents

This chapter explains the cash basis. This is a simpler way for eligible businesses to calculate their taxable income, allowing them to be taxed on the basis of receipts less payments of allowable expenses. For the rest of this chapter, any references to trade include professions and vocations.

For tax years up to 5 April 2024 please refer to the guidance within pages BIM70005 to BIM70100. This also explains the alternative basis for barristers.

Further changes to cash basis were introduced in Finance Act 2024 which apply to tax years starting on or after 6 April 2024 (2024-25). All eligible businesses (see BIM72010) must start using the cash basis from 6 April 2024, unless they elect to calculate their profits in accordance with generally accepted accounting principles. Please refer to the guidance within pages BIM72005 to BIM72073 for tax years 2024-25 onwards. 

  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

  1. BIM72005
    Overview
  2. BIM72010
    Eligibility
  3. BIM72015
    Receipts Overview
  4. BIM72020
    Capital receipts under or after leaving the cash basis
  5. BIM72025
    Value of trading stock on cessation of trade, value of work in progress on cessation of profession or vocation
  6. BIM72030
    Expenses Overview
  7. BIM72035
    Capital expenditure
  8. BIM72036
    Capital Expenditure: Land
  9. BIM72037
    Capital Expenditure: Intangible Assets
  10. BIM72038
    Capital Expenditure: Financial Assets
  11. BIM72050
    Rules not applied in calculating profits
  12. BIM72055
    Leaving the cash basis
  13. BIM72060
    Transitional adjustments: entering the cash basis: overview
  14. BIM72065
    Cash basis: transitional adjustments: entering the cash basis: examples: debtors, creditors, stock
  15. BIM72066
    Cash basis: transitional adjustments: entering the cash basis: examples: accruals and prepayments
  16. BIM72067
    Cash basis transitional adjustments: entering the cash basis
  17. BIM72068
    Cash basis: transitional adjustments: entering the cash basis: examples: successions between connected persons
  18. BIM72069
    Cash basis: transitional adjustments: entering the cash basis: examples: VAT, finance leasing
  19. BIM72070
    Cash basis: transitional adjustments: leaving the cash basis: overview
  20. BIM72071
    Cash basis: transitional adjustments: leaving the cash basis: calculation
  21. BIM72072
    Cash basis: transitional adjustments: leaving the cash basis: prepayments
  22. BIM72073
    Cash basis: transitional adjustments: leaving the cash basis: capital expenditure