B8.101A Basis periods—continuing trades
For most 'continuing trades' (ie those that have been trading for three years or more) the basis period is the period of 12 months ending with the accounting date in that tax year1.
C runs a long established business and has always prepared accounts to the 31 December. Her assessment for 2019/20 will be based on the profits of the period 31 December 2019.
If there is no accounting date in a tax year but there is no actual change of accounting date then the basis period is the 12 month period beginning on the day after the end of the basis period for the previous tax year2.
This rule is necessary because for unincorporated trades (unlike companies, D1.108), there is no maximum period for which accounts can be drawn up.
A has produced accounts annually for a number of years to 30 September. He produces accounts for the 12 months to 30 September 2017 and then for the 24 months to 30 September 2019. There is therefore no accounting date in 2018/19. The basis period for 2017/18 is the accounts for the 12 months to 30 September 2017. The basis period for 2018/19 is the period of 12 months from 1 October 2017 to 30 September 2018, ie one half of the profit for the 24 months to 30 September 2019.
There are slightly different rules that apply in the early and final years of trading, and these are discussed at B8.102