The UK tax agency has released guidance and legislation to raise the threshold for self-employed persons and partnerships to account for income and expenses on a cash basis.
The cash basis allows taxpayers to account for income or expenses when they are received or paid for.
The UK is to amend Section 31B of the Income Tax (Trading and Other Income) Act 2005 to set the relevant maximum threshold at which an individual can elect to calculate trade profits using cash basis accounting. The change is to increase the cash basis threshold to a fixed amount of GBP150,000 (USD189,600) and the exit threshold to twice the entry threshold. The cash basis thresholds for Universal Credit claimants (for both entry and exit) will be set at GBP300,000.
Presently, the entry threshold for cash basis accounting is equal to the VAT registration threshold (currently GBP83,000).
Source: www.tax-news.com/news
