BIM70015 | Cash basis: receipts: overview

S31A ITTOIA 2005, S106C ITTOIA 2005

Cash basis receipts are any amounts received in connection with the trade during the basis period for the tax year and include:

• Cash and cheques

• Tips, fees and commissions

• Value of any payments ‘in kind’ for work done or goods sold

• Some capital receipts (see BIM70020)

• The value of trading stock on cessation of trade (see BIM70025)

• The value of work in progress on cessation of profession or vocation (see BIM70025)

• Just and reasonable additions in respect of non-commercial (non-arm's length) transactions (see below)

• Certain transitional adjustments on entering the cash basis (see BIM70060 onwards).

Any cash basis receipts which are received after the cessation of a trade using the cash basis are treated as post-cessation receipts (see BIM90030).

Amounts not reflecting commercial transactions

For businesses using the cash basis, there is no requirement to bring into account as a receipt the value of any goods taken from the business for personal use (see BIM33630). Instead, a just and reasonable adjustment should be made to reflect the uncommercial transaction. So, for example, the cost of any such goods might be disallowed as an expense.