How does the cash basis work in relation to self employed persons who have in the past completed income and expenditure statements rather than a full set of accounts. Can somebody who has in the past complete an I&E statement continue to d so or are they automatically switched in to the cash basis.
I am particularly thinking in relation to losses and finance costs because for income and expenditure statements it was possible to claim sideways loss relief and more than £500 in finance costs.
I have just been asked to act for somebody who has completed an income and expenditure statement for a number of years and it's been awhile since I last completed accounts without a balance sheet and accruals and prepayments. So advice on this would be appreciated.
Thanks
Replies (3)
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No one is required to use the cash basis. Income and expenditure statements include accruals and prepayments,
Well if you don't want to use the cash basis just continue with the accruals basis, but do it properly.