Year of Cessation The year of cessation is the year a business stops trading and closes down itsoperations. At such point, any taxable profits not yet subjected to tax will have to besubjected to tax in the tax year the business ceases to trade. Once the business has been trading over several years, the current … Read More

Year of commencement With knowledge of the current year basis period, you will find that if a businesscommences trade in June 2018 and prepares accounts to 31 May 2019, its first yearof assessment will have to be 2019/20, which is the tax year the end of the 12 monthsfalls into, despite the fact that it … Read More

Current year The basic rule is that an individual’s taxable profit assessed in each tax year will bebased on the profits for the 12 months accounting period ending in that tax year. Thisis known as the current year basis. This applies to individuals who havebeen in trade for several years past. An individual in business … Read More

Welcome to first in a series of blog posts about basis periods, found in the AAT Level 4 Business Tax module. 1 – Introduction The basis period is the accounting period within which an individual’s income or profitswill be subjected to tax. Every individual tax payer pays their taxes based on a tax year. The … Read More