The business results are based on cash receipts less business payments.

You do not have to include stock, work in progress or bad debts.

Adjustment are required where you change from one basis to the other.

There are some restrictions on what expenses can be claimed.

There are special rules for claiming capital expenses.

These maximums are the total of your combined business’ receipts calculated on a cash basis.

Losses cannot be carried backwards or sideways.
Loan interest paid for any reason can be claimed, up to £500 pa.

If your accounts are simple and you have a personal mortgage or other non-business loan it may be worth opting for cash basis to claim the loan interest deduction which will not otherwise be due.