Cash basis changes in 2024

Find out how accountants can support their clients

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The UK government ran a consultation during 2023 on the cash basis rules as part of its wider focus to simplify tax for small businesses.

Prior to April 2024 and the new tax year, more than 66% of eligible businesses didn’t officially use the cash basis, even though the government believes many may benefit from its simplicity.

In reality, the number of taxpayers using the cash method is probably much higher than what is reported because of the number who do not realise they need to opt out of the default accrual basis.

So, the result of simplifying and expanding the cash method should create a more accurate picture of cash basis use across UK unincorporated businesses.

This article from Sage breaks down the cash basis changes that were implemented on 6 April 2024, which clients are affected and how you can help your clients.

Here’s what it covers:

  • what has changed with cash accounting?
  • when did the cash basis rules change?
  • businesses affected by the changes
  • should your clients use cash basis or accrual accounting?
  • how to help your clients with cash basis changes
  • final thoughts on the cash basis changes.

Read the article now