What is Cash basis?
Cash basis means you record income when you receive it and expenses when you pay them, rather than when they are due. It is the default method for most individual landlords with property receipts of £150,000 or less.
Why it matters to landlords
It is simpler and matches your bank account, which makes digital record keeping easier. Rent paid late is counted in the period it arrives.
You can choose the accruals basis instead, and some landlords must use it. Joint owners who are spouses or civil partners generally need to use the same method.
Under cash basis, a deposit you hold for the tenant is not your income unless and until you keep some of it.