Income Tax (Transitional Provisions) Act 1997

This section applies if:

you were an STS taxpayer for the most recent income year that started before 1 July 2005; and

you continued to be an STS taxpayer until the end of the 2006‑07 income year; and

you used the STS accounting method for the 2005‑06 and 2006‑07 income years; and

you are a small business entity for the 2007‑08 income year.

You can continue to use the STS accounting method:

for the 2007‑08 income year; and

for any later income year for which you are a small business entity but only if you used the STS accounting method for the income year before that later year.

You are a small business entity for the 2007‑08 and 2008‑09 income years and you continue to use the STS accounting method for those years. You are not a small business entity for the 2009‑10 income year so you cannot continue to use the STS accounting method for that year. Because you cannot use the STS accounting method for the 2009‑10 income year, you will not be able to use it again for a later income year even if you are a small business entity for that later year.