The cash basis provides a simpler way for eligible unincorporated 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 cash basis accounting became the default basis of calculating profit and losses for self-employed taxpayers including those in partnerships, and the previous rules on turnover limits, the interest restriction and the limitations on the utilisation of losses no longer apply. See the Cash basis ― overview guidance note.

The treatment of specific expenses as detailed in this guidance note are summarised in a table at the end of the note at Summary of expenses treatment.