Small businesses and cash accounting – Budget 20 March 2013

Eligible small businesses (generally those with receipts not exceeding the VAT

registration threshold) will be able to use a simple method to work out their

taxable profits. The simple method is based on money-in money-out recording

(the ‘cash basis’), rather than accounts prepared on an accruals basis.

Businesses using the simple method will not have to make year-end accounting

adjustments and other calculations primarily designed for larger or more

complex businesses. They will not have to compute figures of debtors, creditors

and stock, or generally distinguish between ‘capital’ and ‘revenue’ expenditure.

Unincorporated businesses will also be able to use simplified flat rates to calculate

certain business expenses.

The measures will apply for the tax year 2013-14 and onwards.

Back to Main Page – Budget 20 March 2013

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