Income Tax (Trading and Other Income) Act 2005 section 31C

Excluded persons

Section 31C identifies the categories of person who are not permitted to use the cash basis of accounting for their trade, even if they would otherwise meet the eligibility criteria.

• Partnerships that include a non-individual partner (such as a company) and limited liability partnerships are excluded from using the cash basis.
• Lloyd's underwriters and traders engaged in mineral extraction are excluded, as are those who have elected for the herd basis or claimed averaging of fluctuating profits.
• Persons who have received business premises renovation allowances in the seven years before the applicable period, or who still hold assets linked to earlier research and development capital allowances, are also excluded.
• The Treasury has the power to amend the list of excluded persons by order, but any order that restricts eligibility for the cash basis requires approval by the House of Commons.