Overlap profits on commencement of trade

A business commences on 1 October 2012. The first accounts are made up for 12 months to 30 September 2013 and show a profit of £45,000.

The basis periods for the first 3 tax years are:

 

2012-2013 Year 1 1 October 2012 to 5 April 2013
2013-2014 Year 2 12 months to 30 September 2013
2014-2015 Year 3 12 months to 30 September 2014

If the profits for 2012-2013 are computed by an apportionment using the number of days in the relevant periods, the taxable profit for 2012-13 is £45,000 x 187/365 = £23,054.

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