4a. Business Tax

Question 1

Opening year rules
1. first tax year

Answer 1

Actual basis of assessment
= date of commencement to following 5th April

Question 2

Opening year rules
2. Second tax year

AP ending in the second year:
1. 12 months
2. Less 12 months
3. Over 12 months

4. no AP ending in second year

Answer 2

1. That 12 month period (CYB)
2. First 12 months of trading
3. 12 months to accounting date ending in the second year (i.e. last 12 months of accounting long period of account)
4. Actual basis of assessment 6april to 5april

Question 3

Opening year rules
3. Third tax year

Answer 3

12 months to accounting date ending in the third year
I.e last 12 months of long period of account

Question 4

Change in accounting date

conditions for valid change
- accounting period of new accounting date must be less than how many months
- no previous change in accounting date in last how many years unless
- notify HMRC BY

Answer 4

• 18 months
• 5
• 31st Jan following end of tax year of change

Question 5

Change in accounting date

Assess if the new accounting date is:

• earlier in tax year
• later in tax year

Answer 5

Earlier in tax year
- assess : 12 months to new accounting date
- overlap profit created

Later in the tax year
- assess amount not get assessed upto the new accounting date
- deduct overlap relief

Question 6

Cessation - closing years
1. Penultimate tax year
2. Final tax year

Answer 6

1. Penultimate tax year
   - CYB
2. Final tax year
   - profit not previously assess
   Deduct overtop profits