BIM74085 - Abolition of the cash basis: no return to 'bills delivered basis'

A dissenting voice in 'Taxation'

The notes referred to in BIM74075 and BIM74080 met with widespread acceptance.

You may, however, have seen an article on them in 'Taxation' in early 1999. The author disagreed with the view in the notes that once work in progress is completed the billable amount should be recognised as a debtor (causing profit on the work to be recorded). To accept the author’s approach would be to accept that businesses can delay the taxation of debtors by delaying the issue of a bill; it would be a return to the ‘bills delivered’ basis permitted by SP/A27.

We (and the Institute of Chartered Accountants) are confident that the view expressed in the notes is correct, and that there is no separate category of 'unbilled completed work'.