Income Tax (Trading and Other Income) Act 2005 section 201

Tax year in which there is no accounting date

Section 201 explains how to determine the basis period when no accounting date falls within a particular tax year.

• Where a trader has no accounting date in a tax year and did not start or permanently cease the trade in that year, a default basis period applies.
• The basis period is the 12-month period beginning immediately after the end of the basis period for the previous tax year.
• This rule does not apply where a change of accounting date means a period of account entirely spans the tax year — in that case, section 214 treats an accounting date as falling in the spanned year.
• The rule is also subject to exceptions for the second tax year (section 200) and for changes of accounting date in the third or later tax years (sections 215 and 216).