The cash basis provides a simpler way for smaller businesses to calculate their taxable profits, which is based on receipts less payments subject to any adjustments required for tax rules. This guidance note details the calculation of profit, for details on the eligibility of a business to use the cash basis, see the Cash basis ― overview guidance note and for a summary of the consequences of joining or leaving the cash basis, see the Cash basis ― joining and leaving guidance note.

From 2024/25, the cash basis for trading businesses will be expanded to remove the turnover limits, the interest restriction and the limitations on the utilisation of losses. See the Cash basis ― overview guidance note.