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The government wishes to extend the self-employed cash basis so that as many businesses as possible are able to use it.
It has published a consultation document which proposes the following:
- increase the turnover thresholds for businesses to use the cash basis;
- set the cash basis as the default, with an opt-out for accruals;
- increase the £500 limit on interest deductions in the cash basis; and
- relax restrictions on using relief for losses made in the cash basis.
The government considers these proposals have the potential to widen eligibility for the cash basis to almost all small self-employed businesses.
Responses should be emailed by 7 June 2023 to businessprofits.admin@hmrc.gov.uk with ‘cash basis’ in the email subject line.
