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Tax Tutor.
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Noorshadab
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Hello sir.
Please help me with the following question!!!
Self employment ceasing on 30 June 2020, and the profit for the final 14 months from 1 may 2019 to 30 june 2020 is £106900. Again started self employment on 1 february 2021 until 30 june 21 and five months profit is 55700.
Calculate the trading profit for 20/21 tax years?
Sir, when calculating the first period up to 30 June 2020 the book takes into calculation all of the above 14 montha profit of £106900. Why don’t we time apportion that into April 2020 until June 2020 (3/14*126900).why do we include all the 14 months and why do we include 19/20 tax year profit as well?
The second period starting 1 february 21 and ending 30 june 21 is time apportioned. (55700*2/5)
I am really confused sir.
I really appreciate your response amd thank you very much in advance.
Tax Tutor
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Once again I am concerned that you have not properly worked through the lectures and study notes that in chapter 6 deal with the bases of assessment that apply in both opening tax years, which is relevant for the new business that commenced trading on 1 February 2021 – and in closing tax years, which is relevant for the old business that ceased trading on 30 June 2020.
You must work through these lectures if you are to be successful in the exam.
Noorshadab
Tax Tutor
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