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Mr. cobbler starts business as a sole trader on 1 january 2013 . the accounting date is 30 april.
first basis period is 1 jan 203 to 5 april 2013.
second basis period is first 12 months given in bpp text.
but, i guess it is y/e 5 april 2014 as the period ends not in 2nd tax year.which one is correct?
BPP is correct. This is because there is an accounting date(30 April 2013) ending in the 2nd Tax year(2013/14.., ie from 6 April 2013 to 5 April 2014). The end of the accounting date is IN 2013/14. Now, you check if from the start of trade to that date falling in the second tax year is more or less than 12 months. In this case, it is LESS than 12 months, thus the basis period for the 2nd tax year will be 12 months from the start of trade.
Hi Vipin as Gerald has stated the opening accounting period of 4 months ends 30/04/13 which is in the second tax year, 2013/14, and hence we assess the profits of the first 12 months of trading. If as you said there had been NO accounting period ended in 2013/14 then we would have used an actual basis of assessment which would be the profits from 6/04/13 to 5/04/14.
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