AAT Practice Assessment 2 Task 1B question

VijiVijins
VijiVijins Registered, AAT Student Posts: 9
Hello guys,

Wonder if you could help with this task please. Do you know how do we get 32370 answer


Comments

  • PeterC
    PeterC Registered, Tutor Posts: 229
    The basis period for 2019/2020 was the year ended 30 April 2019
    Therefore
    The basis period for 2020/21 is from 1 May 2019 to 31 March 2021 ie. 23 months
    The taxable income for the basis period is 22,770 + 18,400 = £41,170
    Because this is >12 months, we can claim overlap relief
    Because it is 11 months longer than 12 months, we can claim all 11 months of overlap profit ie. £8,800
    Therefore
    Taxable income = 41,170 - 8,800 = £32,370


    VijiVijins
  • VijiVijins
    VijiVijins Registered, AAT Student Posts: 9
    That's great Peter, many thanks!
  • PeterC
    PeterC Registered, Tutor Posts: 229
    You're welcome
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