Taxation of the unincorporated business for Paper P6 (UK) - part 3: self-test

Test your understanding

(1). Nora began trading on 1 May 2014. 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 2014. His tax adjusted profits per month are set out below.

September to October 2014 (two months)4,000 
November 2014 to March 2015 (five months)3,000 
April to September 2015
(six months)
October 2015 onwards10,000 

If Miza adopts a 31 May year end, what will be his taxable trading profit for the first two tax years of trading?