There are two steps to calculating profits on the cash basis. Firstly, calculate the total trade receipts received in the basis period for the tax year and secondly, deduct the total expenses of the trade paid during the basis period of the tax year (subject to any adjustments required or allowed by law). The basis period for a tax year is normally the 12 months to the date the accounts are made up to in that tax year. For commentary on basis periods, see ¶230-000ff.

Want to read more?

This content requires a Croner-i Tax and Accounting subscription.

Existing subscriber? Log in

No subscription?

Contact us to discuss your requirements.