Basis of assessment ― normal years

Produced by Tolley
Basis of assessment ― normal years

The following Owner-Managed Businesses guidance note Produced by Tolley provides comprehensive and up to date tax information covering:

  • Basis of assessment ― normal years
  • Current year basis
  • Accounting date
  • Special rules

Current year basis

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 2018. As the accounting period ends between 6 April 2018 and 5 April 2019, the profits shown in those accounts (after adjust

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