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Kindly Confirm the below solution is correct .. Practice questions
Jason commenced trading on 1 July 2014 drawing up accounts to 31 May each year.
Trading profit for each accounting period is as follows: £
1 July 2014 to 31 May 2015 33,000
Year ended 31 May 2016 24,000
Year ended 31 May 2017 36,000The solution given for the second period is
2015/16: 1st 12 months (no CYB) 1 July 2014 – 30 June 2015 33,000 + (1/12 × 24,000) 35,000 2016/17
As per my understanding the The second year should be 6/4/2015 to 5/4/2016
But in the above solution it is given as 1/7/2014 To 30/6/2015
How it will be sirr ???
You need to go back to the OT notes and lectures and learn the bases of assessment in the opening years of a new business. In the second tax year you must check to see if there is an accounting period ended in that tax year and if as in this example the accounting period is a short period (less than 12 months) the basis of assessment to be used is the “profits of the first 12 months” of trading. The “actual” basis of assessment that you suggest is ONLY used when there is NO accounting period that ends in the second tax year
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