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what does this mean “in the second year there is no set of accounts ending at all, therefore profit will be assessed on actual profits rising in tax year i.e 6 April to 5 April.The dates in the actual question is commenced trading on 1 February 2019 and first accounts to 30 June 2020. My question is i understand first year should be February 2019-6 April 2019 but then why 6 April 2019 to 5 April 2020 if accounts is to June 2020? Thanks
Have you worked through the OT Study Notes and lectures for Chapter 6?
In your example above what tax years are the first tax year and the second tax year?- Topics: 6
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Basically its a mcq question i will write it out below:
Xose commenced trading on 1 February 2019 and prepared his first set of accounts to 30 June 2020. The period upon which profits will be assessed for the second year of trading is:
A. 1 February 2019 to 5 April 2019
B. 1 February to 31 January 2020
C. 6 April 2019 to 5th April 2020
D. 12 months ended 30th June 2020Please could you explain how you reached your answer?
Thanks
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My understanding is first year should be 1 February 2019- 5 April 2019
Second year 1 February 2019- 31 January 2020 because it needs to be a 12 month period with the overlap profit. But this is not the correct answer- Topics: 6
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Sorry are you able to help still? Thanks
The first statement I made in the answer I initially gave was:
“Have you worked through the OT Study Notes and lectures for Chapter 6?”The further statements you have since made make me think that you have not – if you had you would have seen me work through examples to demonstrate the meaning of the rules for all the different scenarios you might encounter in the 2nd tax year and you would have had practice by working the examples.
The next statement I made was:
“In your example above what tax years are the first tax year and the second tax year?” and in the further responses you have given you have not done this.Go back to the notes and lectures that show you how these rules are applied and how to approach any scenario in opening years that you may have to deal with.
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