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  • Philip Nickson & Co Ltd

    Chartered Accountants and Registered Auditors
    Tel: 01285 810099
    Email: info@philipnickson.co.uk

  • Philip Nickson & Co Ltd

    Chartered Accountants and Registered Auditors
    Tel: 01285 810099
    Email: info@philipnickson.co.uk

Cash basis option for landlords
09/01/2019

The cash basis scheme helps sole traders and other unincorporated businesses benefit from a simpler way of managing their financial affairs. The scheme was extended to landlords from April 2017. The scheme is not open to limited companies and limited liability partnerships. The entry threshold for the cash basis scheme is £150,000 and you can stay in the scheme until your business turnover reaches £300,000.

Unlike other taxpayers that need to opt-in to use the scheme, the legislation assumes that landlords will use the cash basis as the default method of calculation. A landlord can still elect to opt out of the scheme, in which case they can continue to use generally accepted accounting practice (GAAP) to calculate their taxable profits. Landlords are also required to continue using GAAP if their rental receipts are in excess of the £300,000 scheme threshold.

The cash basis scheme allows landlords to use the cash basis when recording income and expenditure i.e. recording the flow of money from and to the business based on actual money flows. Traditional accounting uses the accruals basis i.e. income and expenditure is recorded when a bill is received, or a customer is invoiced.


Philip Nickson & Company Ltd. Chartered Accountants, Paradise Farm, High Street, Kempsford, Fairford, Gloucestershire, GL7 4EU
Registered to carry out audit work in the UK & Ireland by the Institute of Chartered Accountants in England and Wales
Registered in England & Wales No. 5439384.

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