A Simplified Cash Basis for Small Businesses-it’s not simple

The Government is currently putting in place the legislation to implement what was designed to be a simplified way fo accounting for “small” businesses. A small business for this purpose is where the turnover/level of sales is less than the VAT limit (currently £77,000).

As indicated by an article from the ICAEW (see here), this is proving to be all but simplified. The ICAEW amongst others are calling for the implementation of this new scheme to be delayed 12 months until April 2014.

Our own view on this new proposed system is that we will continue to use the existing basis of accounting, as in almost all cases we believe this should result in lower taxable profits. However, do of course speak to us if you would like to discuss the proposals in more details and how they could affect your own small business.