Cash Basis for Small Businesses (1) Flashcards
1
Q
Which businesses can have elections?
A
Receipts in a 12 month accounting period that don’t exceed £150,000
2
Q
When must a trader leave the scheme?
A
If receipts in the previous tax year exceed £300,000
3
Q
What does the cash basis assess?
A
Cash receipts - cash payments of allowable business expenses
4
Q
What is ignored in the cash basis?
A
Payables
Receivables
Inventory
5
Q
Why must accounting profit be adjusted?
A
For taxation purposes
6
Q
What does expenditure on plant and machinery attract?
A
Attract tax relief
7
Q
How are tax adjusted trading profit/loss computed?
A
Receipts (e.g. sale of plant & machinery) - Expenses (e.g. purchase of plant & machinery)
