CTM01405 - Corporation Tax: accounting periods: apportionment
CT is an annual tax imposed and charged by Finance Acts for 바카라 사이트˜financial years바카라 사이트™ (INA78/SCH1). A financial year starts on 1 April, and ends on the following 31 March. It is named after the calendar year in which it starts. So the financial year 2020 starts on 1 April 2020 and ends on 31 March 2021.
CT is assessed and charged, however, by reference to accounting periods: CTA09/S8 and CHAPTER2/PART2 . Company profits arising in an accounting period are apportioned between the financial years in which the accounting period falls: CTA09/S8 (5). This apportionment is made on a time basis (by reference to days). No other basis is acceptable: see CTA09/S52 (trade income) and S1307 (miscellaneous income), and CTA10/S1172 for the general rule.
바카라 사이트˜Period of account바카라 사이트™ means the period for which a company prepares its accounts: CTA10/S1119. Sometimes it is necessary to apportion the profits of a period of account to arrive at profits of accounting periods, most often because the period of account is longer than 12 months (see CTM01510). For this purpose apportionment is also usually on a time basis, but here the profits of accounting periods may be computed by reference to the transactions which took place in that accounting period where this gives a more accurate result - CTA10/S1172 (2) permits exceptional treatment.
This will typically apply where there are a few easily identifiable transactions and the trade is 바카라 사이트˜lumpy바카라 사이트™, as for example in the case of property development. The transactions method was allowed in the case of Marshall Hus & Partners Ltd v Bolton (1980) 55TC539 where the company prepared one set of accounts covering a period of more than five years and six accounting periods. Apportionment by reference to the transactions of each of the accounting periods gave fairer results than time apportionment.