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Hi,
In regards to Question One of the June 14 Exm, I am confused about why the Trading profit does not take into account trading bases of assessments.
Please see relevant information and question below:
Richard commenced self-employment on 1 January 2013. He had a tax adjusted trading profit of £3,840 for the
four-month period ended 30 April 2013, and £12,060 for the year ended 30 April 2014. These figures are before
taking account of capital allowancesa) Calculate income tax payable for 2013/14.
Answer as per ACCA website:
Trading Profit:
Period ended 30 April 2013 £3,840
Period ended 30 April 2014 £12,060
-Capital Allowances^this above does not make sense to me. Firstly, where is the Actual basis of assessment (to 5 April 2013). Where is the CYB? And why is this not pro-rata’d if the period ended 30 April 2014 ends after the 2013/14 tax year? Shouldn’t there be overlap profit
What is going on here?
Help would be much appreciated, as always.
Regards,
YazanAlways better when you can answer your own question! Hopefully you have now understood that you must firstly deduct the capital allowances of the accounting period from the adjusted trading profit of the accounting period and then use these figures in working the assessments for the relevant tax years of assessment.
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