Cash Basis Accounting

Welcome to 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 Basis
    Last Updated on August 1, 2021 by admin Cash 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.… Read more: Cash Basis vs Accruals Basis
  • Cash Basis Eligibility
    Last Updated on June 7, 2024 by admin As 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… Read more: Cash Basis Eligibility
  • Cash Basis Suitability
    Last Updated on June 7, 2024 by admin As 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… Read more: Cash Basis Suitability
  • Accounting Date
    Last Updated on August 1, 2021 by admin When 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 /… Read more: Accounting Date
  • Keeping Records
    Last Updated on August 1, 2021 by admin If 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… Read more: Keeping Records
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