The following Owner-Managed Businesses guidance note by Tolley provides comprehensive and up to date tax information covering:
The usual basis for taxation of sole trader profits is known as the ‘current year basis’. This means that in respect of a year in which the trade is continuing, which is not the year of commencement or cessation, the profits to be taxed are those relating to the accounting period ending in that year.
For example, assume a trader has a 31 December year end and makes up a set of accounts for the year ended 31 December 2016. As the accounting period ends between 6 April 2016 and 5 April 2017, the profits shown in those accounts (after adjustment for tax purposes) will be taxed in the tax year 2016/17. Putting it another way, the basis period for 2016/17 is the year ended 31 December 2016.
The rules relating to basis periods for sole traders apply equally to professions and vocations as they do to trades. They also apply to individual partners but not to partnerships as a whole. Where members join or leave a partnership, they will have different basis periods to the other members.
The rules for basis periods also apply to unincorporated businesses that use the simplifi
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