why is in the practice question mentioned above the previous year trade debt recovered treated as taxable in the current year? I thought that the computation of taxable income for previous year should be corrected and resubmitted to HMRC, hence adjustment were to be done in previous year record and deducted from this year. Am I maybe wrong?
No we don’t make a prior year adjustment in tax we just tax in the current period to reverse the write off in the previous period as opposed to correcting an earlier year’s computation for say something omitted by error from that computation