Self Employed full/short 10 - Cash basis
Cash basis is a simpler way of working out your business profits or losses. You add up all your business income received and take off any allowable expenses paid in your accounting period. If you're a sub-contractor in the construction industry, your income is the full amount, before contractor deductions.
Do not include money you owe or any money you are owed at your end of year date.
Certain businesses cannot use cash basis.
If you used cash basis last year, use it again this year, unless:
- your total business income for 2019 to 2020 was more than £300,000 and your total business income for 2020 to 2021 is more than £150,000 or £300,000 if you claim Universal Credit
- it no longer suits, for example, because you want to claim losses against your income
For more in-depth support to help you complete the 'business expenses' section of your tax return, watch our new series of detailed support videos on YouTube:
For more information, go to Cash basis.
