Corporation Tax Act 2009 section 180

Application of Chapter

Section 180 sets out the circumstances in which Chapter 14's rules on adjustment income and adjustment expenses apply when a company changes the basis on which it calculates its trade profits for corporation tax purposes.

• The chapter applies when a company changes its profit calculation basis between two consecutive periods of account, provided the old basis complied with the law or accepted practice at the time, and the new basis complies with current law and practice.
• A change of basis includes either a change of accounting policy (such as switching between UK GAAP and international accounting standards) or a change in the tax adjustments applied when computing taxable profits.
• A change made solely to comply with new legislation that did not apply to the previous period is excluded, but a change arising from a revised view of what the law requires or permits is included.
• The rules are company-based, meaning the same company must be carrying on the trade both before and after the change; a change of basis that occurs simply because ownership of a trade passes to a different company is not covered.