The Office of Tax Simplification (OTS) has said that the smallest businesses should be allowed to use receipts and payments accounting instead of complying with full GAAP accounts.
The announcement ties in with the recent European directive and looks like momentum is building towards government endorsement of a cash-based accounting regime.
John Whiting, tax director for the OTS, said there's a strong case for a form of cash accounting and that we need to think about “going further” in calculating tax for the smallest businesses.
However some commentators, including many on AccountingWEB, have warned about the deeper implications of such as development. AccountingWEB contributor Steve Collings.
Click here for the full report on the OTS recommendations on small businesses. The official consultation paper is scheduled for July.