Legislation – Finance Act 2024
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Schedule 10Calculation of trade profits etc
Part 1Main provisions
Introduction of cash basis default
2
“Basis of accounting
24ACash basis to apply by default
(1)
The profits of a trade for a tax year must be calculated on the cash basis, unless—
(a)
the trade is an excluded trade in relation to the tax year (see section 25B), or
(b)
an election under section 25C(1) has effect in relation to the trade for the tax year.
(2)
In this Part—
(a)
references to calculating the profits of a trade on the cash basis are references to doing so in accordance with this section, and
(b)
references to a trade in relation to which the cash basis applies are to a trade the profits of which are required by virtue of subsection (1) to be calculated on the cash basis.
(3)
Chapter 3A contains provision about the calculation of profits on the cash basis and the application of the rest of this Part in relation to the cash basis.
(4)
Where the cash basis applies in relation to a trade, sections 27, 28 and 30 do not apply in relation to the calculation of the profits of the trade.
(5)
This section does not affect provisions of the Income Tax Acts relating to the calculation of the profits of Lloyd’s underwriters.”