Income Tax (Trading and Other Income) Act 2005 section 214

When a change of accounting date occurs

Section 214 determines when a change of accounting date is treated as taking place for the purposes of the basis period rules, and how to handle situations where the transitional period straddles an entire tax year.

• A change of accounting date occurs in the first tax year in which accounts are drawn up to the new date, or if earlier, the first tax year in which accounts are not drawn up to the old date
• A switch from a notional date determined under section 211 to an actual accounting date counts as a change of accounting date, even if both dates happen to be the same
• Where the change falls in a tax year that has no actual accounting date (because a long period of account straddles it), the date corresponding to the new accounting date is treated as the accounting date in that straddled year
• This deemed accounting date in the straddled year is used to determine the basis period for that year and, where section 219 applies, for the following tax year as well