Commencement of trade

Commencement of trade

Didn't find your answer?

My in-laws started working as self employed in October 2010 (nature of business = shop (lease)).

  1. My understanding is that their first basis period would be October 2010 to 5/4/2011. Is this correct
  2. if 1 is correct, are the trading profits (accounts) prepared up to 05/04/2011 (anything after that ignored, as opposed to preparing accounts for 12 months and then apportioning)?
  3. Is the first tax return due on 31/01/2012?

Many thanks

Replies (3)

Please login or register to join the discussion.

Euan's picture
By Euan MacLennan
25th Jul 2011 12:08

Yes, Maybe & Yes

Yes - the first basis period is from commencement of trade to 5th April 2011.

Maybe - you can prepare accounts for the period up to 31st March or 5th April 2011 or you can prepare accounts for a year up to September 2011 and then apportion the profits on a daily basis.  Many people prefer to have year-ends coinciding with the tax year in order to avoid overlap profits which have to be remembered and deducted from the profits in the year of cessation of the trade, but there might be some tax planning opportunities.

Yes - the 2010/11 tax return must be filed online by 31st January 2012 or on paper by 31st October 2011, so provided you are filing online, you would have time to prepare accounts for a year or even slightly longer for apportionment if you wished.

Thanks (0)
steve_knowles.png.jpg
By Steve Knowles
26th Jul 2011 16:44

You're right

in 1 and 2; as regards the accounting year end it can be worth looking at the expected profits or losses. as different figures can suggest different year ends - eg if you are expecting a loss up to 5 April, but an overall profit for the first 12 months, it would generally be better to go with a 5 April year end so that you have an actual loss claim.

Have a word with your accountant.

Thanks (0)
avatar
By liselites
27th Jul 2011 10:21

Thank you for your time and answers.

Much appriciated.

 

Thanks (0)