BIM72055 - Cash basis: leaving the cash basis
An election can be made under S25C ITTOIA 2005 to calculate profits in accordance with generally accepted accounting practice (GAAP), the election is made using the checkbox on the SA return. ÌýÌýIf the check box is not completed then cash basis must be used instead.Ìý Accordingly, a trader who wishes to continue to use GAAP year on year must therefore check the appropriate box on their self-assessment tax return each year.
Businesses leaving the cash basis must revert to using GAAP to calculate their profits and may need to make some adjustments at this pointÌý(seeÌýBIM72070).