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When the cash basis scheme may not be suitable

The cash basis scheme helps many sole traders and other unincorporated businesses who benefit from a simpler way of managing their financial affairs. The scheme is not open to limited companies and limited liability partnerships. The scheme allows qualifying businesses to use the cash basis when recording income and expenditure. However, some small businesses are more suited to using the cash basis than others.
If a business falls within any of the following categories, the cash basis may not be the best option:
want to claim interest or bank charges of more than £500 as an expense
run a business that is more complex, e.g. have high levels of stock
need to obtain finance for the business – a bank could ask to see accounts drawn up using traditional accounting to see what the business owes and is due before agreeing a loan
have losses that the owner wants to offset against other taxable income (sideways loss relief)
In a nutshell, the scheme is most suitable for straight forward businesses especially those that provide services. Businesses must have a turnover of £150,000 or less to join the scheme and can continue using the scheme until the business turnover reaches £300,000.

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HM Treasury coronavirus (COVID-19) business loan

HMT Information about the Coronavirus Business Interruption Loan Scheme (CBILS), Coronavirus Large Business Interruption Loan Scheme (CLBILS), Bounce Back Loan Scheme (BBLS) and Future Fund Scheme.

Under the Coronavirus Business Interruption Loan Scheme (CBILS), 49.247 businesses have received funding so far, with lenders approving £10.11 billion.

The Coronavirus Large Business Interruption Loan Scheme (CLBILS) has approved £1.77 billion in loans to 279 larger businesses.

Under the Bounce Bank Loan Scheme (BBLS), for small and micro businesses, in the five weeks since the launch over 863,584 businesses have successfully applied for funding totalling £26.34 billion.

The Future Fund is a special investment fund for high-growth companies impacted by the crisis, made up of funding from government and the private sector. Funding applications for the Future Fund opened on 20 May 2020 and the first government loans totalling £146.0 million have now been approved for 155 companies.

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