PTP Tax Tip No 31 - Spreading under UITF 40 ' Varying profits

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Q. I am a sole trader working in the professional services industry with a 31st December year end. Because of the type of work I do my profits vary year to year by a large amount. My profit for the year ended 31.12.05 will only be 6,000 whereas in 2006 it could be as much as 80,000. I have some savings but very little income other than my business income. The UITF income adjustment has been calculated at 21,000. I understand the spreading idea but are there any possibilities I've missed to save some money?

A. Yes! There may be an opportunity for you to save some money by paying tax now rather than later. Para 4 sch 15 FA 2006 allows for elections for an additional amount of adjustment income to be taxed in a tax year than would be required under the normal rules. It also allows for calculat...

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