Business Tax

rosiefaith

Hello all,

I am really struggling to understand basis periods. I have tried the question on the practice assessment but I cannot do it I can do the first year its just the 2nd & 3rd.

If anyone can please help and explain in simple terms!! THANK YOU

irentsik

I found a helpful way of explaining it on an ACCA revision somewhere which I noted down like this -

Year 1 tax is paid from start date of business to end of tax year ie 5th April
(basing it on what tax year start date falls into ie 1st Jan 2014 would be 6/4/13-5/4/14 so would be based on 2013-14

Year 2

If period of accounts is less than 12months then tax is payable on 12 months of trading from the start of the business

If period of accounts is 12 months or longer tax is paid on 12 months to accounting date (which would be given in the question)

If period of accounts does not end in that tax year it is done on financial tax year of 06/04/14-05/04/15 (basing it on 2nd year being 14/15)

Year 3 tax is paid on profits for the period ending in year 3

Hope this makes sense

Hahmed

Irentsik, Please can you provide a link onto the ACCA website where it shows revision material for Business Tax.