The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:
The cash basis for small businesses is a simplified form of accounting that uses a cash basis and was introduced from 6 April 2013.
The cash basis for small business (hereafter just‘cash basis’) is available by election under ITTOIA 2005, s 25A. In order to be eligible, the business must meet the three criteria laid down in ITTOIA 2005, s 31A:
A person controls a partnership if he has the right to more than one half of the assets or income of the partnership. If two partners own a partnership equally there is no controlling partner. For non-controlling partners, whether they are in a partnership with a controlling partner or not, only the cash basis receipts of their separate sole trades are aggregated to establish eligibility to use the cash basis for those trades. It does not matter whether the partnership also uses the cash basis or not.
The cash basis receipts are any receipts that are received during the basis period and would be brought into account under the cash basis.
The basis period is explained further below, but essentially it must be
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