If a customer pays you for your work, calling it ‘just a bit of cash’ does not cause it to disappear for tax purposes. Business income can arrive in several forms.

Sales, fees and customer payments

Money received for the goods or services your business provides is normally business income whether the customer pays by bank transfer, cash, card, cheque or another method.

Cash still counts

Cash is not a separate tax system. If you are paid £80 in cash for a job, it belongs in your records just as a bank transfer would.

Cash basis timing

Under cash basis, you generally record income when you actually receive it. So an invoice sent in March but paid in April is normally recorded when the money arrives. Traditional accounting works differently.

Do not confuse money in the account with sales

Moving £500 of your own savings into the business account does not magically create £500 of sales. Good records distinguish business income from your own transfers and other non-trading movements.

TaxSnapper lets sole traders record income as it happens so the year-end total is built from actual transactions rather than January guesswork.