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Good afternoon,
In this part of the question participants were asked to calculate Bayle Defender’s income tax payable for the tax year 2010-11.I would like to get some clarification as to why the trading profit from part (a) was used as is in the computation, why wasn’t this profit prorated based on the applicable months relating to the tax year 2010-11.
In my attempt of the question I prorated the profit, which based on the answer provided by the examiners this was incorrect thing to do.
My thinking is this: if the year end is 30 September 2010 for the self-employment income, wouldn’t the period of account lie in two tax years, 2009/2010 and 2010/2011?
So why then wouldn’t we need to prorate the profit based on the respective tax years?
Your help is much appreciated
Hi Sharline there are a couple of points arising out of your question, firstly from the dates you quote it sounds like you are looking at the original question probably on the ACCA website which has not been updated for changes in legislation since then – you must use an exam kit for the Finance Act 2013!! Secondly and more specific to your query it is apparent that you have not studied the bases of assessment that apply to unincorporated traders most specifically in opening years of a new trade – see OT course notes chapter 6!
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