C · Glossary
Cash basis
Accounting method where income is recorded when received and expenses when paid.
Cash basis is a simplified accounting method — you record income only when money arrives in the bank and expenses only when you pay them. From 2024/25, cash basis is the default for sole traders and partnerships (you can opt out).
Easier than traditional accounting (accruals), but limits some interest-deduction and loss-relief options.
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