Readers of Accounting Web may have seen Nichola Ross Martin’s article on the potential benefits of allowing small unincorporated businesses to prepare their accounts on the basis of cash received and spent.
At the moment this isn’t possible and all businesses have to use accruals accounting – prepayments, accruals, WIP, UITF40, the list goes on and on. For small businesses who just want to tick along quietly and make enough to run the family home, that can be a real burden.
HMRC are looking into ways of cutting business red tape, and cash accounting is one possibility we might be able to encourage them to adopt.
Mike Truman at Taxation has now taken this up and is holding a poll so that business owners and accountants can vote on whether cash accounting would be a good idea. Personally I think it would be an excellent idea.
May I encourage readers to go to www.taxation.co.uk and vote.