What is the difference between Cash Basis and Accrual Basis when fetching MTD obligations?

The tax basis determines when your income and expenses are reported to HMRC.

Cash Basis: Reports income and expenses when you receive or pay the money. For example, if you create an invoice in May and receive the payment in June, the income is reported in June.
Accrual Basis: Reports income and expenses when you create the invoice or bill, regardless of when the payment is received or made. For example, an invoice created in May is reported in May even if the payment is received in June.

Select the tax basis that matches the accounting method you use for HMRC reporting. If you are unsure which tax basis applies to your business, consult your accountant.

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