The entry threshold for trading businesses wanting to use the cash basis method for calculating taxable profits was set at the VAT registration threshold (£83,000).
As from 6 April 2017, the entry threshold will increase to £150,000. The exit threshold where businesses will no longer be eligible for the cash basis will continue to be double the entry threshold, so will increase to £300,000.
The measure is designed to allow more self-employed businesses to benefit from a simpler method of calculating taxable profits and ease cashflow pressures of many smaller businesses.
This measure is part of the attempts to assist the small business community who will be affected by Making Tax Digital.