Income Tax (Trading and Other Income) Act 2005 section 230

Person liable

Section 230 identifies who is liable to pay tax on adjustment income arising when a business changes its basis of calculating profits.

• Tax on adjustment income is charged to the person who receives that income or is entitled to it.
• The liability falls under the chapter dealing with adjustments on a change of accounting basis.
• This replaces the earlier charge under Schedule D Case VI in the Finance Act 2002.
• The rule is straightforward: if you receive or are entitled to the adjustment income, you are the one who must pay the tax on it.