- This topic has 2 replies, 2 voices, and was last updated 7 years ago by
.
- Posts
I do not understand how the trading profit to include in the tax year 2015/2016 year has been arrived at. Help me understand the calculation from BPP below (ignore Capital Allowances)
Ronald commenced self-employment on 1 January 2015. He had a tax adjusted trading profit of £3,840 for the four-month period ended 30 April 2015, and £12,060 for the year ended 30 April 2016. These figures are before account of capital allowances.
Period ended 30 April 2015 3,840
Period ended 30 April 2016 12,060
Capital allowances £18,000 × 8% × 30% (432)
=11,628
× 8/12 7,752
= 11,592Once you have computed the adjusted trading profit (after CA’s) for each accounting period you then need to apply the rules for the bases of assessment in the opening years of a new unincorporated trade to determine what figure of profit will be assessed in each tax year – have you studied these yet??? – OT course notes Chapter 6
Yes but maybe I’m getting it all wrong. I am thinking is that for
p/e 30 April 2015 he should be taxed 3/4 * 3840 (2880) since the first basis period should be from Jan 2015-March 31st 2015
and for p/e 30 April 2016 basis period will be from April 2015 to March 2016
I’m I mixing up?
- You must be logged in to reply to this topic.