new cash basis for retail?

A question about : new cash basis for retail?

Hello,
I am wondering if anyone can help with a query regarding the treatment of stock purchased in the year.
It used to be only treated as an expense when the stock was sold and unsold stock remained as an asset in 'closing stock'
Am I right that now we can include all stock as an expense in the year of purchase even if unsold that year?

Also that a one off adjustment to using cash basis is that the 'closing stock' from last year can be added to this years expenses?

If so it will help to save me some tax this year

Thank you
regards
Hunnie

Best answers:

• Yes, that's right, but do remember if you opt for the simplified cash basis, you have to adopt all the rules. That means you must use the mileage allowance rate (not proportion of motoring costs), and you must use the "use of home" rates (not proportion of home costs nor the Ј4 per week claim), you can't claim loss relief and your interest expense costs are capped. The rules don't allow for any "mix and match" of the cash against the earnings basis rules. It's all or nothing. You need to go through the simplified cash accounting rules with a fine toothcomb to check what you can and can't claim.
  Also remember, it's only for smaller businesses and it doesn't apply to limited companies at all.
• Thank you Pennywise,
  All that is better for me anyway
  Looks like I might save some tax this year and have realised just in time!!
  There are articles out there about the cash basis but they don't usually specifically explain how this affects retail.
  regards
  Hunnie