Schedules
Schedule 10Calculation of trade profits etc
Part 1Main provisions
2Introduction of cash basis default
After section 24 insert—
Basis of accounting
24ACash basis to apply by default
1
The profits of a trade for a tax year must be calculated on the cash basis, unless—
a
the trade is an excluded trade in relation to the tax year (see section 25B), or
b
an election under section 25C(1) has effect in relation to the trade for the tax year.
2
In this Part—
a
references to calculating the profits of a trade on the cash basis are references to doing so in accordance with this section, and
b
references to a trade in relation to which the cash basis applies are to a trade the profits of which are required by virtue of subsection (1) to be calculated on the cash basis.
3
Chapter 3A contains provision about the calculation of profits on the cash basis and the application of the rest of this Part in relation to the cash basis.
4
Where the cash basis applies in relation to a trade, sections 27, 28 and 30 do not apply in relation to the calculation of the profits of the trade.
5
This section does not affect provisions of the Income Tax Acts relating to the calculation of the profits of Lloyd's underwriters.