Accounting Period

hjr

Possibly a dumb question, but can't seem to find specific answer for it...

Is there a maximum length for an accounts period? Client has accounts produced for 24 months, but now wondering if I need to split this in 2 twelve months periods for Form 11 and taxation purposes, or can I use the 24 month statements and apportion the profit on a 50:50 basis...

I was trying to find the specific section in TCA that would apply to this...

Cheers

nompere

The legislation is S.65 Taxes Consolidation Act 1997.

Here are Revenue's notes: https://www.revenue.ie/en/tax-professionals/documents/notes-for-guidance/tca/part04.pdf

y0ssar1an22

as above S65 2 c, will refer you back to the top line; taxed on 01/01/2019 - 31/12/2019.

really they need to be split, rather than apportioned 50:50.

realise that is a lot of added work, which the client prob wont pay for. some might say just to apportion 50:50.

ETA: http://www.irishstatutebook.ie/eli/1997/act/39/section/65/enacted/en/html

Calahonda52

While it is clear what the law is, I would look at turnover or whatever the top line business metric is for each year and apportion on that basis rather than 50/50

hjr

Thanks for the replies, that's been a great help! It definitely makes sense to apportion on basis of turnover rather than split the accounts 50:50

Marcusm

This is a sole trader case? As you refer to 24 months accounts, is this the first period of trading? If so then you need to follow section 66:

For the first year of asst, actual profits from commencement to 31.12
Second year, first 12 months profits
Third year, profits of a 12 month accounting period ending in the year of asst

As you’ll note, the first 12 months profits determine the taxable profit for 2 different years of assessment. If the profits have been rising from year 1 to year 2, this will give an advantageous result for the client.

Irrespective, trying to divine taxable profits from. 24 months set of accounts will only highlight the case for Revenue attention as having failed to comply with the most basic of rules.

Your client will need to prepare proper accounts and it might be to his/her advantage.