What is CASH BASIS accounting? UK small business basics
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- เผยแพร่เมื่อ 13 มิ.ย. 2024
- As part of UK Self Assessment tax you can chose to keep records based on the Cash Basis or Traditional Accounting schemes. In this video I explain what Cash Basis or Cash Accounting means and why you might want to use it as a simpler alternative to Traditional or Accruals (GAAP) based accounts. Remember to always seek professional help from an Accountant and don't forget to Subscribe and Share for more small business tips!
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Thank you, better explanation than from HRMC.
Love how you peeped through the CC on ACCRUALS for a split moment, so they looked like specs.
for anyone wandering too haha @ 2:41
I love your videos. You are super clear, touch lots of points and make it very easy for lay person to understand. Super!
Thank you very much for this info, just what I needed to understand.
Very helpful. Thank you.
Nice and clear. Thanks.
Excellent explanation. Thankyou for that. :)
awesome - gosforth handyman advising on accounting too, thanks!
Thank you very much!
very helpful thanks
Hi I’ve found your videos a great help.... many thanks. Could you answer a question for me please,when using simplified allowances for my van (ie mileage allowance) do I just ad this in the allowable expenses box on my return ..? Many thanks.....
Hi very nice video, would greatly appreciate if you could guide on- will it be considered cash basis if somebody receives payment from an organisation and person on his/her bank account where he/she submits invoice to an organisation for the online payment that is received to his/her bank.
Hi Andy, thanks for all of the great free content that you provide and for this Cash basis accounting information.
If you had a photographer (Cash basis) who took a business portrait on 1st May and then was paid by the client on 5th May, you would record the date of payment in your accounting spreadsheet and you would also have a record of payment in your monthly pdf bank statement.
Since you don't provide the client with an invoice, is it a legal requirement to provide a receipt to your client after receiving payment or is the payment showing up in your bank statement enough ?
If you have to provide a receipt, is there any specific information that is required to be put on the receipt ?
Thanks for your help Andy
What's best if you're a sole trader with low levels of stock but have to buy expensive parts for customer repairs, sometimes in the £0000s ? I'm think mobile service engineers repairing high value equipment where it is completely unrealistic to be carrying around £100k in parts so they get ordered as and when they're required. So not necessarily a high profit income but a large turnover in value of parts purchasing. Cheers for any advice.
as a new TH-camr, should I register as selfemployed and do my tax return by myself or find an accountant?
Hi sir How to do account tha principal and loan for cash basis accounting in company? Please clarify
Hi. I work for one Company as a self employed. What’s better for me ? Money on my account every week. Company is paying tax every month.
This is my first year of opening a sole trading business. Is an accountant really necessary? What about "Record Keeping"? Should I keep all Reciepts? Many thanks. Great Video!!
Yes, yes and yes! None of these are optional really :)
very informative..im considering trading on Ebay starting next year ...im also employed as well ...so would a cash basis be for me ? it does appear to fit .... regards
That should be fine to get you started - always speak to an accountant to confirm. 👍
If an individual purchases a furnished holiday let with no capital allowances previously claimed on the property that has a small annual turnover of £20,000, can he use the cash basis for his tax return and claim for fixtures and fittings already in the property on the date of purchase as a business expense, or would he need to use the accruals basis to benefit from capital allowances?
Holiday lets are a funny one. There's a lot of stuff that you would think you could claim for that you can't. Some info here but I would check with an accountant at least for your first return. www.gov.uk/government/publications/furnished-holiday-lettings-hs253-self-assessment-helpsheet/hs253-furnished-holiday-lettings-2018 👍
Hi is this applicable for ppl like me who are doing amazon flex and ubereats. Sounds like this cash basis will suite me n gives me an easier way to do tax return myself without hiring an accountant?
I would always suggest getting an accountant to help with at least your first return - they'll probably save you more than they cost you. 👍
Is it cash basis to those working for agencies in the construction site? Like crane driver, forklift driver....
This can get quite complex so I would definitely speak to an accountant. Sometimes you're employed by the agency. Sometimes you're self employed and use the CIS scheme. Sometimes you work through a limited company. Sometimes you work through an umbrella company. I think CIS works on cash basis but don't hold me to that - speak to an accountant. 👍
It doesnt mean i should get paid only by cash? I can make and send invoce and get paid by bank transfer?
Yes, nothing to do with physical cash. 👍
What should I do if I use cash basis but forget to pay the money into my account? I have invoices for the work but no evidence for cash basis in my accounts.
What do you mean by forget to pay the money in to your account? Where is the money at the minute? Or do you mean it is physical cash?
@@SmallBusinessToolbox yes sorry, I mean if i get paid in cash from an invoice but forgot to pay it into my account. Does that matter if you go cash basis?
Are you sure about the cash accounting threshold?
I thought it was turnover up to 1.35million
www.gov.uk/simpler-income-tax-cash-basis/who-can-use-cash-basis
I was looking at VAT cash accounting www.gov.uk/vat-cash-accounting-scheme
Which my company do.
Ah, this is for income tax / self assessment - not VAT. 👍
Small Business Toolbox
Cheers for clarification
Really enjoy all your channels 👍🏻
Cheers GC!
I had so many people that didn't want to pay after I send them an invoice, suome excuses...Oh I forgot or I got distracted or can you break it down for us, then they want stuff doing for nothing. I have a card reader now, I get instant payment after I finish the work, so no nightmares chasing owed money. I send them a paid receipt
or write one out. Tradesmen should be charging a min of £65ph in England as they don't work all 365 a year. Holidays/week ends/bank holidays/ illness/ etc, etc.
Yup - the card reader changes everything. Unless it was a VERY trustworthy customer I didn't leave site until I was paid. 👍
hiii. started off as sole trader in may this year. then went limited company in oct. all profits goes straight back into buisness as i hold into my employed job as my only earning. being limited company i now have to pay tax wont i :(
Corporation tax for ltd. 👍
@@SmallBusinessToolbox damn! i should of stayed as sole trader as i believe my profits are turned into expenses making my profits ZERO as i reinvest to build my buisness while i hold on my employed job as my only earning under sole trader i only pay national insurance?. can i put company to 1 side until im big enough for it? i wanted to get the name to stop others from getting the title name incase i become big as its starting to grow already but im still tiny
There's pros and cons. You can still off-set expenses for ltd. but it's a little more complicated and you really need an accountant to help here. Get your accountant to advise on bringing things in to the business that you already own and having that added to a directors loan account, for example. Good luck! 👍