This is a freeview ‘At a glance’ guide to Accounting: Simpler Income Tax (cash basis)/fixed expenses.
Small unincorporated businesses have to choose between several different combinations of accounting methods in order to work out their profits for tax purposes.
Two different accounting systems
There are two different ways to prepare a set of accounts in order to arrive at your taxable profits for tax purposes.
We refer to:
Simpler accounting was introduced in April 2013.
Four different methods of claiming tax relief for deductions
Once you have chosen accounting methods, the next step is to work through the different rules governing what expenses you can claim as a deduction from business income. Some of these rules become mandatory if you are adopting the cash basis. Some may be adopted voluntarily so you can in certain circumstances be free to 'mix and match'.
Each business is different and so the right combination of claims and reliefs depends on you.
Getting started - what is the cash basis?
Which system for me? See Cash or accruals accounting toolkit
Which expenses for me? See Flat rate expenses or actual cost toolkit
Small amounts of income or low expenses? See Trading Allowance
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