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
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A sole trader is a self-employed individual who owns and runs their business personally, with no legal separation between the owner and the business. Key
