Basis Periods

System
System Posts: 100,534 🤖 Admin 🤖
edited June 18 in AAT student discussion
Has anyone got any bright ideas or Inspirational thoughts on how I can get my head around Basis Periods??? I Just can't grasp how to calculate the 2nd year!!! Any help would be greatly apprecited as I think i'm going mad!

Comments

  • System
    System Posts: 100,534 🤖 Admin 🤖
    Basis Periods

    It depends on whether there is a period of account (i.e. financial year end) in the second fiscal year or not. Remember that sometimes the initial financial "year" can be more than 12 months.<BR><BR>If the answer is no then the basis period is the fiscal yeat (^th April to following 5th April)<BR><BR>If the answer is yes, then ask a further question: How long is the period of account? If less than 12 months the basis period is the first 12 months of trade. If 12 months or longer then the basis period is 12 months to the accounting date in the second fiscal year.<BR><BR>Graham Blott
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Basis Periods

    Don't forget that there will be an overlap of profits, ensure that you clearly show these.
  • System
    System Posts: 100,534 🤖 Admin 🤖
    Basis Periods

    I use a simple line diagram. Draw a horizontal line across the page. On top of the line put the 5th April dates for all the years you need. On the bottom of the line enter the dates that fit your accounts. Extend these downwards, and all will become clear, including overlaps. This can also be used to apportion tax due into different years. It is difficult to explain in words, every picture paints a story, but try it - it works for me.

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