Sir,
I don't understand why the trading profit is on accounting year, I though it will be on tax year,
3840/4 + ( 12060*11/12), but it's from from January till December
Richard commenced self-employment on 1 January 2013. He had a tax adjusted trading profit of £3,840 for the
four-month period ended 30 April 2013, and £12,060 for the year ended 30 April 2014.
Ask the Tutor ACCA TX-UK
trading profit
You need to learn the bases of assessment that apply in opening years (see OT course notes chapter 6 section 1.1) and then apply to this example. In 13/14 (the 2nd tax year) the taxpayer has a short accounting period ended within that tax year (4 months to 30 April 2013) hence the rule is to use the profits of the first 12 months of trading.
I know the bases of assessment, but I didn't it'd apply in this case. thanks a lot Sir
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