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O mia babbino caro – what a Jolie story we have here (not)

Performance Accountancy

What do I have in common with Angelina Jolie?

Well, not a lot at first glance but it turns out there is something, or rather someone.

Because, funnily enough, before I began putting quill to parchment on this latest missive to you, dear reader, I was idly doom-scrolling through social media.

I’d heard some rumours about a forthcoming biopic about the wonderful Maria Callas and that “Angie” (as her mates call her) would be starring in the role.

So imagine the irony when I discovered that the Hollywood icon has been verbally sparring with her with daddy on social media.

Not about her baby, about that Trump fella (insert childish observation here).

Yes, that’s counter-culture icon John Voight.

Turns out he’s quite the Trump fan now – stop giggling at the back!

Now I’m vaguely aware that Angelina has done a lot of positive stuff in her UN role so this must be making for some awkward conversations around the Thanksgiving dinner table this year!

Whilst most of La Jolie’s body of work has passed me by, she’s clearly very talented and certainly has huge screen presence and charisma.

Can she pull off this role though?

Will she be singing?

Will they dub over her like they did with Renee Fleming in “Bel Canto” for Julianne Moore?

In what must have taken the writing team hours of creative thought, “Maria” is set during Callas’ final days in 1970s Paris.

Don’t expect it to be all glitz and glamour, this is likely going to be rather gritty as it is based on “true accounts” of Callas’ life and let’s face it, it wasn’t all kittens and sunshine!

It was a life filled with music for sure and a whole heap of passion but also tragedy.

Jolie shot to fame playing the role of “Gia Carangi” way back so she won’t flinch from telling the tragic story that ended with a heart attack aged just 54 and has commented that;

“I take very seriously the responsibility to Maria’s life and legacy. I will give all I can to meet the challenge.”

Quite why her syntax caused her to temporarily become “Yoda” is beyond my comprehension but I wish her well – wonder what her dad will make of it.

The film is due to be released in 2024.

Capital Gains Tax on the sale of an inherited property.

Capital Gains & Mortgages and “interest” rates - a contradiction in terms? Performance Accountancy, Louise Herrington, Getting a Mortgage when self-employed

The tax man likes to get his money somehow, and one of the “easiest” ways is on inherited property. An estate including property, may be passed to beneficiaries without any inheritance tax (IHT) being paid as it depends on the value of the estate, how many children inherited and if there is any spousal transfer before death.  We are not going to go into these reasons in this blog, and we are going to use dummy numbers to illustrate the points being made.

For this post, we will focus specifically on selling an inherited property in the UK and how capital gains tax may apply.

What is Capital Gains Tax?

Capital Gains Tax is a type of tax that you need to pay when you make a profit by selling something valuable, like property, stocks, or even artwork. It’s the Government’s way of collecting a small portion of the money you earn from selling these things.

Let’s imagine that you inherited a property from your father. The value of the property when you got it (called the probate value) was £300,000. However, when you decided to sell it, you found a buyer who was willing to pay £375,000. That’s great news because, on the face of it, you made a profit of £75,000!

When you do this, there is no tax for the person who passed away to pay. The estate was mopped up, inheritance tax paid (if applicable) and the property was passed to the beneficiaries. It is the person selling that property that will have the tax to pay as in effect this is a second property for the person and you are not selling your principle private residence as you have your own home that you live in.

How is Capital Gains Tax Worked Out?

In order to calculate the gain, you take the profit, less the personal allowance for capital gains (for 2023/2024 it has gone down from £12300 to £6000) and you then get a taxable gain of £69000. If there are two people selling the property, then the £69,000 will be divided by two. But let’s assume it is a single person.

Now the amount of tax to pay is based on a percentage, which is either 18% if you are a basic rate taxpayer, or 28% if you are a higher rate taxpayer. For ease, let’s assume that your income (from PAYE, Self Employment etc.) is over £50270, you will have to pay 28% on the £69,000 gain, so handing over to the tax man £19320.  You will therefore walk away with £355,680 in your bank account.

Add in a sprinkle of complication

Now we can put in a few complications.   If you inherited the property 3 years ago and did not live in it but say rented it out, and then you go and live in it as your principle private residence for a year, assuming the same gain of £69000, as you have live in it for 12 months out of 48, the gain then drops to £51750 which gives a tax bill of £14490.

Should you then move out whilst you try to sell it, the fact that you have lived in it, you can be given a maximum 9-month grace period which counts towards the number of months living it. If it only takes a month to sell after you move out, you only get 1 month grace period.

Registering Capital Gains Tax

Now the final thing you need to know about is that once the sale has been completed, you need to register the capital gain at HMRC and pay over the gain within 60 days of completion, so make sure when you start the sale process, you have all your ducks in a row with regards probate value, improvement costs, sales costs like estate agent fee etc as those 60 days pass by really quickly.

Here is how you report the gain>>

Always check with an accountant or tax advisor about the potential sale and taxes to pay as you may be planning something in the future and some small adjustments can change the outcome of tax on the sale.

Oyster and TFL Travel

Transport for London travel evidence

I get a lot of queries about TFL Oyster card travel and TFL contactless travel, with people stating they don’t know how much their business spend is on their cards as they don’t have any detail.

Well, we can deal with that. It’s very, very simple. All you need to do is register your Oyster card or your contactless payment card at the TFL website ( . That way when you register it, you’ll be able to go in each month and download a copy of your statement which will show you every single trip that you have done in that month. When you download it, you can highlight the ones that are business and leave the ones that are personal.

Sometimes I suggest to people, you might want to get two Oyster cards or two different payment cards. That way you use one for business and one for pleasure. There is a downfall to that, in that if you are doing travel for a day, and some of it is business, some of it is personal, using two different cards mean you have the potential of not breaking the threshold to get your travel free after a certain amount. So there is a downside to that.

Now, I did mine years ago, that’s because I’m old. I get an email every Wednesday showing me what my travel was in the previous week. I can go through, print that off and say, “Here you go. This is how much I’ve travelled and that is business.” Luckily, I don’t live in London, so it’s not that much of an onerous task. But for those people who do, I really recommend keeping the diary to say what you are doing, whether you are auditioning, rehearsing, whatever you might be doing for your business, and register your contactless cards and Oyster cards at TFL, and that way you’ll be able to pull the data.

Beware though, the data does not remain on the TFL website forever. I thought originally it was six weeks, then someone said it’s six months, and then somebody else said it’s a year. So always check it. I suggest pulling the data at the start of the next months just to make sure you get the data.

Vital evidence – get it and keep it.

Beware about on-line stock trading

Online stocks & coin trading and UK tax

I want to give you a bit of a health warning about online trading and UK tax issues.


I’ve seen a massive increase in people playing on online platforms for bits of spare money they might have. Be it Bitcoin, Chip, Coinbase, Trading 212, interactive investors, eToro and various other platforms like it, including playing on platforms within the EU.


The problem you’ve got is that these platforms may not keep adequate records in order for you to complete your UK tax return. A lot of people think, “Well, it’s EU trading. I don’t need to worry” or “I’ve not made much or any profit, so I don’t have anything to declare”. Unfortunately, yes, you do.


You need to make sure that whatever platform you can use, they can provide an end of year consolidated tax statement for the UK. It has to be in the year 6th of April to the following 5th of April, not a European year. Some of the platforms do provide this, but not all.


The statement should include dividends paid to you, any interest paid, but more specifically, the capital gain & loss per sale and a summary for the year.


If this is not provided, you will have to keep very detailed records of when you buy an investment as to when you sell it, and if you partially sell it, how much of the individual investment did you sell?


You may only make a small profit or maybe a loss, but you need to tick the box that you had capital gains. If you sold over £49,200 worth of stocks and shares in the tax year, even if the initial investment you have played with is a small amount that you have just reinvested lots of times, you must report it on your UK tax return and detail out the sales proceeds, purchase costs, losses and gains, plus attached back up to the calculation.  You might’ve produced a loss which you can carry forward. You might’ve produced a profit and it could be covered by the capital gains tax threshold, so you may not think it’s important. It is important and must be declared even if no tax to pay.


One thing that’s been picked up very recently is HMRC get reports from UK and European trading platforms, and it will show if people in the UK have been dabbling on these markets and what income they have received. The problem being is HMRC only get to know the income. So if you’ve sold some investments, they just know how much you sold it for. They don’t get the information about how much it was purchased for. Therefore, it looks like you could have had an income of, let’s say, £100,000, but they don’t know you actually spent £95,000 to get that income. They just know the income and they will open an investigation if you end up on the naughty person list.  it’s up to you to collect these records to prove that you don’t have that £100,000 stashed away.


If you received any dividends from European trading platforms, then foreign dividends need to be declared either in the foreign box on UK dividends page if less than £2000, or in the foreign section of the tax return.


It may take a couple of years for those reports to come through, but they will be followed up with.


This is just a heads-up. Some of these online platforms are pretty useless at keeping the information. So unfortunately, it is down to you to keep detailed records of what you’ve purchased, what you’ve sold, when you sold it, did you get any other income for those returns.

What’s new with class 2.

What’s new for Class 2 National Insurance for tax year 22/23 onwards?


For those of you that have already completed your tax return for this year and didn’t have a high level of self-employed profit, you may notice something strange is going on.

You always have an option to pay Class 2 National Insurance if your self-employed profits are under £6,725. It means you do not have to pay the £3.15 a week for the 2022/23 tax year. It is optional.  I always encourage it as it goes towards a few state benefits, but more importantly it adds a year towards your state pension.

This is the same that has been all the time if you’re below a small profits threshold. No change there.


Should your self-employed profit be over £11,908, then you have to pay the full Class 2 amount. Again, no difference with that. For 23/24, it will be £12,570 because the government brought Class 4 National Insurance thresholds in line with income tax threshold. Yay. Makes things so much easier.

Where it gets strange is if you have self-employed profits between £6,725 and £11,908, then the government says you don’t have to pay Class 2 National Insurance and they’ll give you something called a notional credit and add that year to your National Insurance record. You get the full year that goes towards your state benefit, but you don’t have to pay for it. Woo hoo. No, they don’t actually pay you back the £163.80, it is notional. I have been asked that several times.


So this is something to think about. If you have no other income and your self-employment profit is low, try and get your profits between £6,725 and £11,908. That way you won’t have to pay Class 2 National Insurance and you’ll get the credit.


But beware, there is no point in increasing your self-employment if you breach the threshold of income tax with other income such as PAYE income, rental income, etc because increasing your self-employed profits to save the National Insurance will actually then push you up and more pay income tax. So that’s just the heads up.


There is a bit of tax planning you can think about, but don’t think too hard about it. It all depends if you have other income apart from self-employment.

National treasure alert – Martin Lewis is right, you need to check this

You’ve gotta love Martin.

Fighting the good fight and genuinely doing his best to ensure the great British public get their fair share and don’t miss out. He’s a national treasure but what about your treasure?
You know, the pension you’ve been carefully squirrelling away ever since you were employed?

Wait, you’re self-employed now…OK, that’s harder than ever but hey, at least there’s the safety net of the State Pension.

Isn’t there?

Well, the problem is, for a lot of people, there are some “gaps” in earnings and there’s only a short window right now in which you can fill these gaps. These gaps also mean there’s an opportunity to turn £800 into £5,500 according to our Martin, which is technically true but is a tad trickier than the headline-grabbing alchemy suggests.

It all comes down to something called “Transitional Arrangements” which is very dull but essentially it means you CAN go back and fill in any lost national insurance contributions to top up your future nest egg but you have only got a small window here.

Like, April 5th small. (ed – as of April 2023 – this got extended to 5th April 2025)

Loads of people are affected by this, either by gaps in employment, low income, not claiming certain benefits or…being self-employed. If you have been self-employed any time in the last 15 years or so, you may not have earned enough money to pay towards the Class 2 National Insurance. For example, if you had low profits, you are exempt from paying it or were due to pay it by the 31st January and did not pay your tax bill on time.

If you didn’t have any self-employed income above a certain threshold, then it’s likely you have not paid into the national insurance system that will give you your state pension.


Right NOW, you can go back to 2006 to make up any years you are missing for your state pension. You can even have a nosey online and see what national insurance credits you’ve got and if the year is full or not.

Handy links below.

The thing is, by the time you come to retire, you need to have at least 35 qualifying years of national insurance contributions. Most people don’t worry about it because their PAYE and their salary is over the threshold to make sure they’re paying into that pot. But self-employed folk often don’t have this certainty, especially in the Performing Arts and
especially over the last couple of years!

So at the moment, yes, you can go back to 2006 and ask for them to give you a fee of how to make up any missing years.

But from April 2023, the time limit for making voluntary contributions to update all your years is back to the normal six years. You can only go back to 2017, (2018 once we hit the 6th of April 2023). So what do I do to save my treasure hoard Louise? (Edit – Special arrangements means you can still go back to 2006 until 6th April 2025).

Right, all you need to is log onto your personal tax account and have a look at the national insurance section

You’ve probably never noticed it but it’s there and right now, their phone lines will be ringing so crack on with this please guys and girls. From there you can open each year.
It may say “full” in which case, a small victory dance of smugness if permitted.

Of course, it may not.

Dance postponed.

If it says a year is not full, it may give you an approximate amount of how much you have to pay to make that year full. It is often something like £16 a week and this is where Martin is conjuring his alchemy from.

The thing is, you could be looking at rather than an expensive bill if you have a number of years to complete but at least be aware of this and act if you can.

Do this now.

1. Check your National Insurance record to see if there are any shortfalls.

2. If you have shortfalls, the system will say how many more years of contributions you can make, but that’s only for National Insurance. It’s not to increase your pension. So there
is another section on your personal tax account that shows you your pension forecast.

3. Go into that and you will be able to see how many years you’ve got that are completed contribution years, and then it will tell you how many more years you need to contribute
to get to the full state pension.

Loads of folk actually opted out of the State Pension in the ‘80s so you are not alone.

Just remember that the clock is ticking on this one, so if you need to go back to 2006, you must get everything in place and pay it by the 5th of April 2023.

Otherwise, you can only go back six years.

Now let’s go find some treasure.

Once upon a time, there was a land where dreams came true

Or they did if you wished upon a star anyway*.

However, some who went in search of this magic kingdom wanted to become the very star themselves, or at least snaffle a cameo role to add to their portfolio.

Now, the leaders of this magical kingdom knew this and they sent out heralds throughout the land to search for the next plucky performers who wanted a shot at stardom.

They let it be known that their envoys would visit several UK cities in early 2023 to hold auditions for new ‘cast members’ although as yet they have not actually confirmed when they would be taking place.

Anyway, logistics aside, a wonderful tale of joy, opportunity and dreams coming true was in the making. All of a sudden, with a twinkling of bells, the Fairy TaxMother appeared.

‘Well this is all rather lovely,” the Fairy TaxMother exclaimed! 

‘It could be a wonderful opportunity for lots of aspiring performers to kickstart their careers and portfolios.

‘However, (the Fairy TaxMother glanced around nervously and whispered behind her hand) I would urge them to ensure that they do keep their records because this is not a tax break, even though it might seem like a holiday!” With that, the spell was broken.

Because meanwhile, far, far, FAR, away from the magic kingdom was another realm built on totally opposite tales of improbabilities, calls on hold and crushing realism.

They called it the In-Land (Revenue)

Luckily, the Fairy TaxMother has access to both realms, by means of some VERY exciting qualifications that she won’t bore the readers with right now.

Suffice it to say that she speaks their language and understands their customs.

Here’s her advice when returning to these lands from the Magic Kingdom (or other foreign lands).

‘Plenty of performers think if they’re paid from a foreign country into a currency bank account or even a currency bank account abroad, they don’t have to include it in their UK tax return, because; “Well it wasn’t paid in GBP” or “It was paid to me into my French bank account.”

‘Unfortunately, your UK tax return covers your worldwide income, if you are a tax resident in the UK.

‘Bear in mind that Inland Revenue departments in different countries do talk to each other. So if people have been paid overseas, especially in Europe and have had withholding tax deducted from them, then that will get reported back to the UK government.

‘The bottom line….don’t let a Disney finance fairytale become a tax tale nightmare.

And with that, the Fairy TaxMother disappeared in a cloud of tax deductible pyrotechnics until the next time that she can crowbar a fairytale into a tax on earnings angle!

*Disclaimer – past wishing and reported success of said wishes may not indicate future wish based success. Not ALL dreams come true.

HMRC in “chaos” SHOCK news – refunds worth thousands delayed

Imagine my surprise (spoiler alert…none) when this Saturday’s wholesome brekka with a coffee and the newspapers was rudely interrupted by the taxman.

Not literally.

There wasn’t someone in a bowler hat rapping at the door with an umbrella.

If there was, there is always the very real threat that I might break into a Mary Poppins number!

No, sadly, it was a BLARING headline in that most steady of publications, “The Times”, that
caused me to bolt my bacon, abandon my avocado and perform a sharp egg-sit from the table.

It transpires that not only are people waiting months for money they are owed, they reported
that some tasks that should be taking 15 days are taking 10 months to complete!

Now, hyperbole aside, this is alarming.

Almost as alarming as blaming it on “fat fingers” – their words not mine – which saw one poor
business being chased for money it didn’t owe.

Making Tax “Digital” indeed!

It appears targets are being missed in 14 out of 27 service categories.

This includes the BIGGIES too, self assessment refunds and appeals against penalties.

So if this includes you, press on gentle reader as I guide you through the latest show of sh*t.

They’ve blamed a number of factors, with home working a convenient stick they appear to have
found in their overgrown and weed infested garden.

The Times’ analysis revealed that the worst service area was helping people to get a refund
from income tax deducted from savings, missing their 15 day target by a mere 140 days.

Meanwhile, disputes over a tax overpayment took 138 days instead of 15.

Alarmingly, with business on the up and fees increasing for many performers, making group
business registrations for VAT took 76 days against a target of 30; and registering a commercial
property for VAT took 214 days instead of 30.

More on what that might mean for you as you approach the VAT threshold next week.

An HMRC spokesman said: “We’re sorry that customers have experienced delays with some of
our services. Overall customer satisfaction is above 80%, but we know there’s more to do and
we’re recruiting more staff.”

Righto, that’s nice to know that you’re sorry HMRC.

Meanwhile, please, please, please realise that if you are banking on any kind of swift turnaround
on your affairs at HMRC, stop it.

Please also check how close you are sailing to the VAT threshold.

To recap, it is £85,000.

If you don’t get registered sharpish, you’ll be the one with egg on your face and that’s no yolk.

Scottish Tax Payer

Am I a Scottish Tax Payer?

I know it sounds like a daft question, but it is not that obvious as you could live in England and work in Scotland, or live in Scotland and work in England. So where do you pay your taxes?


The simple answer is: if you live in Scotland, then you are a Scottish taxpayer irrespective of where you work. The taxpayer status applies to the whole of the tax year, and the rules state you cannot be a Scottish taxpayer for part of the year and a non-Scottish UK taxpayer for the other part.

If you live outside of Scotland but work inside of Scotland, that does not make you a Scottish taxpayer, as it is based on where you live.

For a PAYE person, HMRC will make that determination and your tax code will have an S on it.

However, for the self-employed, it is your responsibility to decide if you are a Scottish taxpayer or not.

Now, if you moved into Scotland or out of Scotland, then you need to look at where your main residence has been in the tax year, and if you’ve been resident for more days in Scotland for the tax year, then you are deemed a Scottish resident and a Scottish taxpayer. It’s also vice versa if you spend most of your time in England, Wales, or Northern Ireland, then you would be deemed a non-Scottish taxpayer. So you might have to count your days of where you are residing, and you count a day from midnight at the end of that day.

The complication comes is if you have two or more homes at the same time. Then you have to establish where your main residence or main home is. You look at where you live, or spend most of your time. It doesn’t matter if you own the home, if you rent it, or you live in it free of charge. Woo-hoo.

But there is a but. Isn’t there always? If you have two places to live, e.g., a home, a family, and your social life in Edinburgh, but you work in London for most of the time and you rent a flat in London, you may work more days in London than you are residing in Edinburgh, but that does not necessarily make you a non-Scottish taxpayer. You look at where your life is carried out. If your immediate family is in a family home in Scotland, you spend most of your social life there, your doctor and dentist is there, that then puts you as a Scottish taxpayer. A Scottish taxpayer therefore has to pay tax based on the Scottish rules, which are 19%, 20%, 21%, 41%, and 46%.

Wales started this idea of a Welsh Tax resident from tax year 2019/20 and they follow the same rules based on where you reside. At the moment, they have the same income rates and tax rates as England and Northern Ireland.

So there you go. That is how you determine if you are a Scottish taxpayer. There is already a button to press to tell HMRC where you are tax resident, and when you start the 19/20 tax return, Wales will be an additional option.

What is this cash basis thing?

When you complete your self assessment tax return and the self employment section, there is a question about if you have used “the cash basis” to do your accounts.
Many people understand it to be if you have created your accounts based on money received and money spend in the year. It’s supposed to be a simple process, but there are hidden problems that most people are not aware of. This is all around losses & capital allowances for it you have purchased equipment like a new computer or an instrument etc.
Hopefully I have explained it in this video as well as what is known as the accruals basis (the opposite to the cash basis).. It is a little on the long side, so please bear with it. Ooh – and i mention cake !  No surprise there.


Here is the approximate transcript.


This is a question that gets asked plenty of times because there is a box in the self-assessment tax return that asks the question whether you have used cash accounting to do your self-assessment and your self-employed accounts in. Cash accounting is exactly what it says on the tin. It says you make your accounting records when you physically receive payment into your business or into your bank account, or into your cash. It doesn’t matter if it’s received via PayPal, received directly into a bank account, received physically in cash or check. It’s when you have received the actual money.

Let’s say for example, you raise an invoice to Mr. and Mrs. Blythe for their daughter’s singing lessons. You raise it at the beginning of the term, but you don’t actually get paid it until near the end of the term, ignoring the annoying part of that. You would only account for that invoice when you received the money from Mr. and Mrs. Blythe. You don’t account for the invoice when it’s raised. Equally, on the other side you account for your costs when you have physically paid for them. Now, that is very easy if you actually pay in cash. It’s very easy if you pay by direct debit or transfer out of your bank account, or indeed if you pay via PayPal, because they’re fairly instant payment methods.

The trick comes if you pay by a credit card, you might have put the cost on a credit card but you haven’t actually paid for it until you pay the credit card bill. If you only pay a credit card bill a certain amount per month, it’s very hard to know whether you’ve paid for which business expense. That’s what cash accounting is. There are problems with it. You have to keep very good records as to know when you physically have paid for things, but in your business, if you make a loss in your business, then you cannot do anything with that loss. It could be your first year of business you’ve had a lot of setup costs, not too many people know about you, so they haven’t employed you very often, but that loss is dead, so you cannot carry it forward to next year and use the loss against any profit in the following year.

It also means if you have purchased any capital items, so a new instrument, a computer, an expensive printer, or various things like that, under the cash accounting rules, it is a cost incurred at that time, because you’ve paid for it at that time, and therefore it goes into the accounts for that tax year. That means you cannot claim any capital allowances. All costs come out of that year. Again, if you make a loss, you cannot carry forward that loss or the capital cost into next year. The only positive side of that is if you’re buying a new instrument on a loan agreement, then technically you’re only putting towards let’s say 100 pounds a month, instead of 3000 pounds for the instrument. You’d actually expense out 100 pounds a month.

That is what cash accounting is. Very simple, because if you were HRMC, they have two hats. They say you have to have the invoices and receipts to be able to do proper accounting, but then under making tax digital, they’re encouraging people just to do their accounts from bank statements. They want their cake and they want to eat it. Now, the other side is what is accrual accounting. This is the correct form of accounting that accountants will use all the time and it is definitely our method of doing accounts. What this is, when you raise the invoice, that is when it hits your accounts.

Mr. and Mrs. Blythe, you have invoiced them in let’s say the beginning of the term, which is January, they didn’t pay you until April, which is the end of the term, but you would account for the income in January, and you ignore when they actually paid the bill, which may be a little harsh because it might be across two tax years, but by the time you actually have to pay the tax on that payment, they should have already paid you. Now, the good thing about that is you base it on a supplier invoice date. Even though you might not pay it until two weeks later, two months later, six months later, you account for it at the time you incur the cost, at the time the liability hits you, really.

There are various accounting rules we can jiggle around with, so if you’ve taken a deposit upfront for something, so I don’t know, you’ve taken a deposit for a concert but the concert’s not until four months’ time, then you can defer that income ’til four months’ time, in order to match the income off with the costs. That gets a bit complicated. Accountants can easily do it. It’s what we’re trained to do. Now, there are great things with that, in that you can have the capital allowances. If you do incur losses, you are able to carry them forward for future years. That is much the preferred method.

However, if you are a limited company, the cash accounting system is not open to you. You can do cash accounting for VAT, that’s a completely separate blog post, but actually to run your accounts and your corporation tax, you cannot use cash accounting. Many people do, because they don’t understand the difference. Several people will do cash accounting throughout the year and their accountant will then pull it back into line to say, “It has to be under an accrual basis.” Cash accounting is really only open to the self-employed.

That’s it. Never tick the “Have you used a cash basis?” on the self-assessment tax return if you are doing the accruals basis, or if you’re doing it, you tend to know when you’ve raised the invoice, that’s when you’re accounting for it. Don’t tick the cash basis, because it may cause problems later on down the line.


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