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adarsh1997
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Hello,
-Regarding the cash basis for unincorporated trader, it says that a trader can opt for this method if annual cash receipts are up to £150,000 and cannot continue if it’s annual cash exceeds £300,000.
– What will happen if the annual cash for a particular tax year exceeds £150,000 but is less than £300,000?(for example, it’s annual cash receipt is £200,000) Will the trader be able to use the cash basis?
Thanks.
Tax Tutor
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If cash receipts do not exceed £150,000 then the business may elect to use the cash basis and may continue to use the cash basis if in the future the cash receipts go above £150,000, such as your example above of £200,000.
If however cash receipts go above £300,000 then the business must leave the cash basis and revert to the normal accruals basis
adarsh1997
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