HMRC urges SMEs in Northern Ireland to use new cash flow scheme

Small businesses in Northern Ireland and the rest of the UK are being urged to consider using the “cash basis” scheme that allows them to be taxed on money that flows in and out of their business, rather than using full accounting rules.

This scheme can only be used by unincorporated businesses and sole traders with annual income of less than £79,000 and using the scheme should simplify accounting processes, saving both time and money.

The scheme involves working out the cash received in a year less any money spent on allowable expenses. This negates having to use complicated accounting adjustments normally used by large businesses at the end of the year in order to establish taxable profits. The scheme will be attractive to smaller businesses such as taxi drivers, plumbers, electricians, hairdressers etc.

Wilson Nesbitt Solicitors based in Belfast, Northern Ireland can assist you with completing income and expenditure accounts, submitting your tax return and minimising the risk of a tax enquiry. If you need to talk with one of our tax advisors please contact us by calling 0800 840 9288.