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tax return advice for bus that ceased

  • 12-08-2007 6:52pm
    #1
    Closed Accounts Posts: 1


    I have a tax return for 2006 to complete the business finished
    in March 2006 and I had already got a bookeeper to do my return
    for 2005/2006

    My question is the new tax return form I have gotten only in relation to the last months of 2006, them being Jan, Feb, and March in my case.

    any advice or help appreciated.
    Phil


Comments

  • Registered Users Posts: 57 ✭✭robbie checker


    phil214 wrote:
    I have a tax return for 2006 to complete the business finished
    in March 2006 and I had already got a bookeeper to do my return
    for 2005/2006

    My question is the new tax return form I have gotten only in relation to the last months of 2006, them being Jan, Feb, and March in my case.

    any advice or help appreciated.
    Phil

    The cessation rules are applied as follows:

    1/ In the year of cessation (2006 in your case) you are taxable on 3 months income (Jan to Mar) 06 and the taxable period is 1/1/06 to 31/3/06. If the last accounting period was a 12 month period i.e 1/4/05 to 31/03/06, you are taxable in 2006 for 3/12 of the profits. If the last accounting period was 1/1/06 to 31/3/06, you are taxable for the profits of that period. If the last accounting period was a 15 month period i.e 1/1/05 to 31/3/06, you are taxable on 3/15 of the profits.
    2/ In a cessation, the inspector has an option to review the previous year to actual and therefore you need to see if the actual year 1/1/05 to 31/12/05 profits is greater or less than that already returned to revenue. If less, there is no need to amend the 2005 return. If greater, there will be an additional liability.
    3/ If there are losses incurred in the final accounting period, terminal loss relief may be claimed and you can carry back the losses of the last 12 months of trading to the previous 3 years of assessment provided the losses have not been used already.

    Hope this helps!


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