What is the cash basis for sole traders?

What is the cash basis for sole traders? The cash basis means you count income when the money arrives and costs when you pay them. Since the 2024-25 tax year it has been the default for sole traders, with no turnover limit. No. From the 2024-25 tax year it is the default for sole traders and partnerships without corporate partners, so you use it unless you opt out. Not any more. The old £150,000 entry limit and £300,000 exit limit were removed from 2024-25, so a sole trader of any size can use it. Tick the box on your Self Assessment return to say you used traditional accounting. The law says the choice carries on into later years until you choose the cash basis again, but HMRC's manual says to tick the box on every return, so ticking it each year avoids doubt. Read the full answer, with every source, at rightotax.co.uk.