Chapter 7 - 1.3 - Ongoing Business

Question 1

What happens to sole traders after the first tax year?

Answer 1

They continue to be taxed on the profits arising from 6 April to 5 April

Question 2

What happens if the accounting period ends on 5 April?

Answer 2

Sole traders are taxed on adjusted profits for the accounting period

Question 3

What happens if the accounting period ends between 31 March and 4 April?

Answer 3

The sole trader is taxed as if it ends on 5 April (called late date accounting)

Question 4

What happens if the accounting period ends on any other day?

Answer 4

We apportion profits to tax those falling in the tax year

Question 5

What happens to the sole trader in the tax year in which trade ceases?

Answer 5

The sole trader will be taxed from 6 April to the date of cessation