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Dear sir,
I have read the note and watched the lecture of trading profit period but I still have not known what is the minimum & maximum length of the accounting period of individual trading business. For example, may we have 1 month or 16 month accounting period? If this problem is in the note, please forgive me and may you point out the location of this content.
Thank you!
It is up to the trader to decide which accounting date they wish to use when they start to trade and depending on that start date and choice of accounting date they will then decide to use either a short or long accounting period to their first accounting period end, for example an individual starts to trade on 1 September 2016 and chooses 31 December as their accounting period end date. The trader may therefore choose either of 2 options for the first period, either:
1) prepare accounts for the 4 months to 31 December 2016 and to 31 December thereafter, or
2) prepare accounts for the 16 month period to 31 December 2017 and to 31 December thereafer
The taxpayer is free to choose whichever option they prefer.
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