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Does anyone have any resources to help make the rules clearer, I’m studying f6 kaplan and I keep making mistakes when working out year 2 for the basis rules:(
Have you listened to the opentuition video lecture for the above – definitely worth doing! I struggled at first with kaplan but the way the tutor has explained it, I now understand this.
This is how I get my head around the second year rule.
Firstly, the 2nd year is always 12 months long (unlike potentially the 1st year). The quandary is, where to place this 12-year block.
Start by placing the block so that the 1st day of the block is resting at the 1st day of the start of business. If an end of a period of account falls anywhere inside this block, then leave it where it is. That is your 2nd year basis period.
If an end of a period of account falls later, then slide this block forward, until it reaches this date (i.e. the last day of the 12 year block is the same as the end of period of account). However, if you’ve slid this block so it fits into a financial tax year (i.e. the last day of the block is 5th April) before reaching an end of a period of account, then stop. That is your 2nd year basis period.
For the 3rd year, repeat the above process.
I hope I’ve explained it well enough. I think for the exam, you think in terms of month, so the tax year effectively runs from 1st April to 31st March.
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many thanks for your help
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