Part 2

Trading income
Chapter 3

Trade profits: basic rules

Basis of accounting

Cash basis to apply by default
24A
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.
S. 24A and cross-heading inserted (6.4.2024 for the tax year 2024-25 and subsequent tax years) by Finance Act 2024 (c. 3), Sch. 10 paras. 2, 47 (with Sch. 10 paras. 48-50)