Question re Income Tax Return

Shurwhynot

Bear with me on this one as it's a bit complicated!

I'm doing accounts for a ltd company which commenced business on 01/05/2008 with a year end of 30/04/2009. It was previously a sole trader business, with which accounts were done up until 30/04/2008. His 2007 tax return was done by a senior partner here, and he has asked me to do his 2008 tax return now.

I have worked out his 2008 adjusted profit using time apportioning, but when i'm adding back depreciation, M & T, Telephone etc do i also time apportion these? Sorry my tax isn't hectic! I was told work to add on his P60 from the limited company from 01/05/2008 - 31/12/2008. What section of his P60 do i add on?

Legend100

you will be doing cessation accounts for the sole trade so the taxable profits for 2008 will be from jan 08 to Apr 08 (4/12 of y/e 30/04/08)

I will break it down into two parts:

You the need to do a prior year review of 2007

This will be done on an actual basis ie.. 01/01/07 - 31/12/07

it will be 4/12 of year ended 30/04/07 taxable profits plus 8/12 of year ended 30/04/08 taxable profits. if the combination of these is greater than what was returned in 2007 as taxable profits, then you must make the adjustment to revenue in a revised return. if it is less, you lose out and have to keep the original 2007 return.

As for 2008:
The directors salary per the p60 (ie in the P35 in the company accounts) will be the schedule E and the 4/12 of year ended 30/04/08 per first line of response will be the schedule D case 1

it is the profit that you time apportion, not the individual expenses

pm me if you need more help

Shurwhynot

And is it the Director's net pay per his P60? I have done the prior year view and no need for adjustment

Legend100

No it is the gross pay

This is entered separately to the case 1 income on the Form 11.

The gross pay is entered and also the paye paid per the p60