I've just started the ICB course to AICB level, and I've got a question.
My friend says his business year runs from Nov to Oct. He says his accountant will try to align the business year and tax year. I don't really understand what is involved with this. Could somebody please explain.
The tax year for individuals runs from the 6th of April to the 5th of April. When you file self assessment that is the period that you are covering.
Tax years for companies run from the 1st of April to the 31st of March.
Howeever, the tax year for companies should not be confused with the period for which a business prepares its accounts.
Accounting periods are peculiar to the business in that a business can start at any time and set whatever period they like for their year.
There are major differences between the effect of this upon the self employed as opposed to limited companies. (In your studies you will come accross terms such as basis periods and overlap profits but if you are just starting it's not time to concern yorself with that just yet).
But, if you absolutely have to know now...
Just let me have a glance around the web to see if I can find a nice PDF to explain this as the whole concept is beyond the scope of a reply here....
hang on a sec....
Yeah, needed to look no further than this site. Here's the link :
Responses are not meant as a substitute for professional advice. Answers are intended as outline only the advice of a qualified professional with access to all relevant information should be sought before acting on any response given.
