Overlapping Profits
Mege_P
Registered Posts: 2 New contributor 🐸
I keep thinking I understand this and then I'm getting stumped on questions.
This is in the business tax practice assessment 1 Task 3 for year 2021.
Rupert started a trade on 1 July 2021, preparing his first set of accounts to 31 May 2022. His taxable profits have been:
Period ended 31 May 2022: £32667
Period ended 31 May 2023: £48973
I have worked out the trading income for the first and second year correctly but I can't understand why the overlap profits answer is £30809.
I'm getting confused as to which years taxable profits I should use for the calculation.
The taxable profit should be divided by 11 months (1 Jul 21 - 31 May 22) and multiplied by the 9 months (1 Jul 21 - 05 Apr 22) they overlap?
Please help!
This is in the business tax practice assessment 1 Task 3 for year 2021.
Rupert started a trade on 1 July 2021, preparing his first set of accounts to 31 May 2022. His taxable profits have been:
Period ended 31 May 2022: £32667
Period ended 31 May 2023: £48973
I have worked out the trading income for the first and second year correctly but I can't understand why the overlap profits answer is £30809.
I'm getting confused as to which years taxable profits I should use for the calculation.
The taxable profit should be divided by 11 months (1 Jul 21 - 31 May 22) and multiplied by the 9 months (1 Jul 21 - 05 Apr 22) they overlap?
Please help!
0
Comments
-
Have you checked your basis periods are correct?
Shouldn’t the second year be for 12 months from the date of commencement?0
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