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Cash basis

Cash basis

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Cash basis.  It seems logical to me that, under the cash basis, a payment for a service not used until the following accounting period is tax deductible in the period in which it is paid. The matching principle is so ingrained in me that I find this a bit strange. Am I right? Similarly a receipt of a deposit for work to be done in the following accounting period would be taxable as received. Is that so? 

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Scooby
By gainsborough
28th Jan 2019 16:46

Yep, tax income when it is physically received, deduct trade outgoings when they are actually paid.

The whole point of electing for the cash basis is that you then ignore the matching/accruals rules.

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By andy.partridge
28th Jan 2019 16:51

Cash basis. It's that stuff that goes through a cash book.

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