Paragraph 13

After section 56 insert—

“Cash basis accounting

Application of Chapter to the cash basis

56A

(1)

The following sections do not apply in calculating the profits of a trade on the cash basis—

• sections 60 to 67 (tenants under taxed leases),

• section 68 (replacement and alteration of trade tools).

(2)

For rules allowing deductions that apply only where profits are calculated on the cash basis, see the following—

section 57B (cash basis: interest payments on loans).

(3)

In calculating the profits of a trade on the cash basis, any reference in this Chapter to the incurring of expenses is to be read as a reference to the paying of expenses.”