7 - trading profits (basis of assessment) Flashcards
what is the CYB
current year basis means that taxable trading profits are based on the 12 month period of account ending in that tax year
who does the CYB apply to
limited companies
how does the actual basis work?
in the first year of trading, there won’t be a 12 month basis during that tax year, so profits are time appropriated up until the next tax year deadline
How does the second year of trading work regarding taxable income
if the second year deadline falls in a tax period then the whole profit is taxed like normal
what are overlap profits, as an overarching definition?
when taxable profits are taxed more than once in the first year, these profits are carried forwards each year
how to calucate overlap profits
take the yearly profit figure, multiply it by how many months overlapped
when is the final tax yera for a business
the tax year in which the business ceases to trade
