business tax book page 1.23 task 1.3

kelly2021 Registered Posts: 16

Can anyone please help me with this one?

£16000 is related to 1/6/2019 to 31/05/2020, which is for year 2019/2020, so why £16000 can be included in the tax year 2020/2021? Thanks :)

Best Answer

  • PeterC
    PeterC Registered, Tutor Posts: 243 Dedicated contributor 🌟 🐵 🌟
    Answer ✓
    I'm afraid you are mistaken when you say that the profits for the accounting year to 31/5/20 are for tax year 2019/2020.

    Tax for 2019/2020 is based on the accounting period (the basis period) which ends in that tax year.
    31/5/20 is not in the tax year from 6 April 2019 to 5 April 2020
    Therefore the profits for the accounting period ending 31/5/20 are taxable in 2020/2021


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