Income Tax (Trading and Other Income) Act 2005 section 172AA

Chapter not to apply where cash basis used

Section 172AA confirms that the rules in Chapter 11A do not apply when a trader calculates their business profits using the cash basis of accounting.

• Chapter 11A is entirely disapplied for trades using the cash basis
• This means none of the specific provisions in this chapter affect how profits are calculated under the cash basis
• The exclusion applies solely to the calculation of trading profits, not to other types of income
• This provision was introduced by the Finance Act 2013 as part of the broader cash basis reforms