Difference Between Profit vs Cash Explained for Sole Traders & Limited Companies
2 July 2026
A business can show a healthy profit on paper and still run out of money. Profit is calculated when work is done, while cash only
A business can show a healthy profit on paper and still run out of money. Profit is calculated when work is done, while cash only
Your taxable profit is not the same number as your net profit: it’s arrived at by adding back non-allowable expenses and subtracting capital allowances, and
Tax returns can be hard work but sometime, especially in today’s business climate it’s finding the cash to pay the tax that can be the biggest problem.
As a sole trader you must keep records for at least 5 years after your Self Assessment deadline; as a limited company, at least 6
Your HMRC tax code tells your employer or pension provider how much income tax to deduct from your pay. If the UK tax code is
Making Tax Digital (MTD) is the UK government’s big push to drag tax reporting into the 21st century. Instead of keeping paper records or spreadsheets,
Government grants count as taxable income. You must only recognise them once all attached conditions are met, not simply when the cash arrives in your
A cash flow statement shows you exactly when money moves in and out of your business — not just whether you’re profitable — which is
Management accounts are internal reports you produce as often as you need to make decisions. Statutory accounts are legally required annual filings that go to
When you have to find an accountant in the UK, you first have to know where to look! If you’re on the lookout for special