Self assessment expenses - billing date or payment date?

Question

For my HMRC Self Assessment (expenses), I am wondering if I should put the date of transactions as the billing date or the payment date. Or doesn't it matter as long as I'm consistant?

Answer 1

Unless you're running a self-employed business with a significant turnover (more than £150k), you are entitled to use cash basis accounting for your tax return, which means you would put the date of transactions as the payment date rather than the billing date or the date a debt is incurred.

For payments which have a lag, e.g. a cheque that needs to be paid in or a bank transfer that takes a few days, you might also need to choose between multiple payment dates, e.g. when you initiated the payment or when it took effect. You can pick one as long as you're consistent:

You can choose how you record when money is received or paid (eg the date the money enters your account or the date a cheque is written) but you must use the same method each tax year.