Test your understanding
(1). Nora began trading on 1 May 2015. Her first few months of trading were very profitable but since then her monthly profits have been gradually falling.
Explain the relevance of this information to Nora’s choice of year end.
(2). Miza began trading on 1 September 2015. His tax adjusted profits per month are set out below.
| £ | ||
|---|---|---|
| September to October 2015 (two months) | 4,000 | |
| November 2015 to March 2016 (five months) | 3,000 | |
| April to September 2016 (six months) | 6,000 | |
| October 2016 onwards | 10,000 |
If Miza adopts a 31 May year end, what will be his taxable trading profit for the first two tax years of trading?
