Income Tax (Trading and Other Income) Act 2005 section 225ZAA

Chapter not to apply where cash basis used

Section 225ZAA excludes trades using the cash basis of accounting from the rules in this chapter on deductions for expenditure involving cars.

• This chapter's rules on car-related deductions do not apply to trades using the cash basis
• The cash basis is a simplified method of calculating trading profits based on money received and paid out
• Traders using the cash basis follow different, simpler rules for claiming expenses
• This exclusion was introduced by the Finance Act 2013 as part of the wider cash basis regime for small businesses