Income Tax (Trading and Other Income) Act 2005 section 198

General rule

Section 198 establishes the general rule for determining the basis period used to calculate trading profits for a given tax year.

• The standard basis period is the 12-month period ending on the accounting date that falls within the tax year in question.
• This general rule applies to most taxpayers on an ongoing, year-by-year basis once their trade is established.
• The general rule is overridden by specific provisions dealing with the early years of a trade, the final year, years with no accounting date, and changes of accounting date.
• The special rules that displace the general rule are found in sections 199, 200, 201, 202, 209, 210, 212, 215 and 216 of the same Act.