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Post Info TOPIC: Sole Trader Cessation In Second Year
Phrike


Newbie

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Posts: 1
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Sole Trader Cessation In Second Year
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Hi everyone,

I had a quick query regarding the cessation of a sole trader in their second year of trade. The facts are:

  • They started trading on 1/1/2010, intending to make accounts up to 31/12/10, 31/12/11, etc.
  • The period that went onto their 2010 tax return was the period to 5/4/10.
  • Due to unforseen cirumstances, they actually ceased trading on 31st March 2011.

My questions is, on their 2011 tax return, does the actual 1st 12 month period go onto their return (and overlap profits calculated, if necessary), and then does the final 3 month period from 1/1/11 to 31/3/11 go onto their 2012 tax return, with the overlap profits (if any) accounted for correctly?

Even if this is the case, is it possible to just put the period from 1/4/10 to 31/3/11 onto their 2011 return? I'm not sure about this and believe it to be incorrect.

Thank you all for your assistance.

Phrike

 

 



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MarkS


Expert

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Posts: 1501
Date:
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Hi there

The whole idea is to just tax profits once.

I would say to do the following

2010 tax return 01/01/10-05/04/10 (actual)

2011 tax return 01/4/10-31/03/11 (period of 12 months ending in tax year)

2012 tax return Łnil (as no trading in the assessed period 06/04/11-06/04/12)

You will have overlap profits for 01/04/10-05/04/10 which you can relieve under overlap rules.

Regards

MarkS



__________________

Mark Stewart CA

http://stewartaccounting.co.uk/

Providing accounting, bookkeeping, payroll and tax services to small and medium sized businesses across Central Scotland and beyond.
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