What if a transaction spans two different years?

Last updated 30 January 2020

Imagine you invoice a client on 1 March 2019, and they pay on 1 May 2019. You've invoiced in one tax year, and been paid in the other one. Which year should it be in?

Meanwhile you're renting out a property and pay landlord insurance for 12 months starting on 1 January 2019. Do you need to apportion it?

The good news is that untied helps you follow the rules as simply as possible. For tax purposes, just look at when the cash comes in or out. Find the relevant money in or money out and tag it.

Job done.

(HMRC call this the "cash basis" and is allowed as long as you're turning over under £150,000 for your business or property activity. The term for adjusting money between years is called the "accruals basis". So long as you're below the threshold, we like to keep it simple!)

Did this answer your question? Thanks for the feedback There was a problem submitting your feedback. Please try again later.

Still need help? Contact Us Contact Us