The measure
The threshold for small businesses to elect for the optional cash basis of accounting will be increased from £83,000 to £150,000 of turnover. The cash basis will cease to apply if turnover increases to more than £300,000 in the tax year. Once this threshold is exceeded, calculations will need to be prepared based on generally accepted accounting practice.
Who will be affected?
Sole traders and individuals in partnerships with trading income.
When?
The measure will take effect from 6 April 2017.
Our view
This increase is positive as it offers a simplified method of calculating trading profits for more unincorporated businesses.
The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.
