overlap periods
valentino46
Registered Posts: 124 Dedicated contributor 🦉
Hi all,
when we talk about basis periods and overlap profits it appears that any profits are assessed twice, so resulting in higher tax paid. Is this correct.
cheers
rob
when we talk about basis periods and overlap profits it appears that any profits are assessed twice, so resulting in higher tax paid. Is this correct.
cheers
rob
0
Comments
-
Yup.
Your overlap period will be adjusted profits being taxed twice.
You only get the tax back when you cease to trade, it is deducted off your final PT Comp.0 -
thanks AK,
that seems a bit harsh, is there any way they can recoup the tax as if they were in business for may years it would not be "reclaimable" for a long time.
rob0 -
There isn't a way, no.
However the figures are general quite small as a business in it's first yea isn't bound to make a lot of profit and overlap profits will only happen in one or two years.
Also the overlap is of taxable profits so it'll only be 20% of that figure anyway.0 -
I think you can claim overlap relief if you change your accounting date, but I haven't got any experience of it myself0
-
I've never quite sussed it out but, even though some profits are taxed twice, the right year end can actually mean less tax is paid in the first few years, or it delays it enough to make the double taxation worth it.0
Categories
- All Categories
- 1.2K Books to buy and sell
- 2.3K General discussion
- 12.5K For AAT students
- 319 NEW! Qualifications 2022
- 157 General Qualifications 2022 discussion
- 11 AAT Level 2 Certificate in Accounting
- 56 AAT Level 3 Diploma in Accounting
- 92 AAT Level 4 Diploma in Professional Accounting
- 8.8K For accounting professionals
- 23 coronavirus (Covid-19)
- 272 VAT
- 92 Software
- 274 Tax
- 136 Bookkeeping
- 7.2K General accounting discussion
- 201 AAT member discussion
- 3.8K For everyone
- 38 AAT news and announcements
- 345 Feedback for AAT
- 2.8K Chat and off-topic discussion
- 582 Job postings
- 16 Who can benefit from AAT?
- 36 Where can AAT take me?
- 42 Getting started with AAT
- 26 Finding an AAT training provider
- 48 Distance learning and other ways to study AAT
- 25 Apprenticeships
- 66 AAT membership