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Qus – Martin started trading on 1 jan 2016. His profits for the first 6 months of the trading to 30 june 2016 were 3000 each month. Martin estimates that his profits will be 4000 each month for next 6 months and then 5000 each month thereafter.
a. what is martins trading income for tax year 15/16, 16/17 and 17/18 if he chooses 5 Apr as year end starting 5 Apr 2016.
b. what is martins trading income for tax year 15/16, 16/17 and 17/18 if he chooses 30 Apr as year end starting 30 Apr 2016.
I dont understand the answer which is available in BPP revision kit.
In case a, the first trading period will be 1/1/16 to 5/4/16, the second trading period will be 6/4/16 to 5/4/17, and the third period will be 6/4/17 to 5/4/18.
In case b, the first trading period will be 1/1/16 to 5/4/16, the second trading period will be 6/4/16 to 5/4/17, and the third period will be 1/5/16 to 30/4/17.
I think the figures are easy to work out with that knowledge. Does it make any sense?
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