Income Tax - Assessible Income

Question 1

What is Assessible Income?

Answer 1

It is the tax you pay on the profit based on the period which HRMC assess tax.

Question 2

What is the base period?

Answer 2

6th of April to the 5th of April of the following tax year.

Question 3

What is the rule for year 1?

Answer 3

Starting from the commencing of trade to the 5th of April of the following year

Question 4

What is the rule for year 2 if the Accounting Profit DOES NOT end in tax year 2?

Answer 4

Simply assess the profits for 6th of April to the 5th of April of the year 2.

Question 5

What is the rule for year 2 if the Accounting Profit DOES end in tax year 2?

Answer 5

IF the accounting year is LESS than 12 months, assess the profits for the first 12 months of trading.

IF the accounting year IS MORE than 12 months, assess the profits for the first 12 months to the accounting period end date in year 2.

Question 6

Which is the rule for year 3?

Answer 6

Assess the profits for the 12 months of accounting period, which is ; YEAR to the accounting period end date!