Commencement query

Torres999

Hi there,

I was wondering if I started a company in July 2015 and did 6 month management accounts to 31 January 2016.

What would be my year 1 period of assessment. July 2015 - December 2015?

What would be my year 2 period of assessment. My year end is 31 January 2016. Year 2 accounts to 31 January 2017.

If my profit was 500,000 from 1 July 2015 - 31 January 2016. Would it be 500,000/6*5 = €416,667 for 2015?

Marcusm

Companies file tax returns based on accounting periods. Accounting periods are periods for which you prepare statutory accounts or similar if you fall under the audit exemption - they are the accounts you have to present to an AGM. If you choose an accounting reference date of 31 January, our first tax return period will be for that 6 months. Thereafter you will have 12 months to each 31 January unless you change accounting reference dates.

Torres999

Hi there, thanks for your help but I meant a sole trade business not a company, apologies

roast222

Not to be pedantic but 6 month mgmt accounts is from Jul-Dec no? The first years taxable profits will be actual from commencement to 31 December irrespective of your year end accounting date. If you started on 1 Aug then you are correct in saying that 5/6ths profits will be taken in year 1.

On another note if you envisage making 500k get some advice on the taxation structure of the business, sole trader status could see a massive tax liability.

dogsears

roast222 wrote: »

On another note if you envisage making 500k get some advice on the taxation structure of the business, sole trader status could see a massive tax liability.

Do this anyway, even if the 500k was just for illustration.