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Cash is king! Recent changes to the cash basis

Shared from Tax Insider: Cash is king! Recent changes to the cash basis
By Lee Sharpe, February 2024

Lee Sharpe considers how the cash basis has developed and why HMRC is so keen on the cash basis for landlords, the self-employed and partnerships.  

The cash basis for unincorporated trading entities was originally introduced by FA 2013 to apply from 2013/14 (FA 2013, Sch 4).  


  • The focus was fundamentally on mainstream trading entities such as the self-employed and small partnerships (but not entities that involved companies). 

  • Only smaller businesses were eligible – the monetary test*, typically across an individual’s trading businesses in aggregate, tracked the VAT ‘12-month’ threshold (£79,000 in 2013/14) – 

  • The business’ (or businesses’) gross annual receipts had to be at or below that threshold to be able to join in the first place; while 

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