Welcome to cashbasisaccounting.uk. This website contains general guidance on cash basis accounting and can be read as a book by following the links at the end of the posts. It has been written with sole traders in mind. Comments and suggestions are welcome though individual advice cannot be given. Thank you for visiting.
- Cash Basis vs Accruals BasisCash basis was introduced to make it easier for the self employed to manage their accounts and work out their income and expenses for the year. Cash basis does not mean that you only deal in cash – it is about when transactions are recognised and recorded. This post explains how cash basis differs from […]
- Cash Basis EligibilityAs already mentioned in the previous post cash basis accounting is not available to everyone. Sole traders can use the scheme. Partnerships can use it as long as they are not limited liability. Limited companies cannot use the scheme and there is list of specific kinds of business excluded too – the list is available […]
- Cash Basis SuitabilityAs well as it’s availability to use for your business there is also the matter of suitability for your business – just because you can use it that doesn’t mean that you should. Although it is a much easier system to use there are some downsides. Financial Position The main downside is that cash basis […]
- Accounting DateWhen starting out one of the decisions you will need to make is which date to use for your accounting date or year end. It is easiest if your accounting year follows the tax year which runs 6th April to 5th April – your accounting date / year end is therefore 5th April. Your accounting […]
- Keeping RecordsIf you are self employed you are legally required to keep records in order to file an accurate tax return. Failure to do so could result in a fine of £3,000. Business Income Bank statements, receipts, invoices and any other documents relevant to trading income should be kept. If you are registered for any other […]