Commentary

B2.106 Importance of the profit and loss account

Business tax
Business tax | Commentary

B2.106 Importance of the profit and loss account

Business tax | Commentary

B2.106 Importance of the profit and loss account

Income tax and the profit and loss account

It is almost impossible to ascertain the amount of the profit of a trade to be assessed under ITTOIA 2005 without a profit and loss account1. The exception to this is where a cash basis election has been made (see B2.112). Although there is no requirement in the tax legislation for a trader to prepare such an account (but see below regarding certain partnerships), there is a requirement to keep and preserve records of amounts received and paid out in the course of the

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