Question 4b

(b) Meung Nong commenced in self-employment on 1 May 2010. She initially prepared accounts to 30 April, but will change her accounting date to 30 June by preparing accounts for the 14-month period to 30 June 2013. Meung’s trading profits (after taking account of capital allowances) for the first two years of trading were as follows:
Year ended 30 April 2011 50,400
Year ended 30 April 2012 37,200

Meung’s trading profit for the 14-month period ended 30 June 2013 will be £61,500. This figure is before taking account of capital allowances. The tax written down value of her capital allowances main pool at 1 May 2012 was £10,400, and there will be no additions or disposals during the 14-month period ended 30 June 2013.

Meung’s business will continue for the foreseeable future.

Calculate the amount of trading profit that will be assessed on Meung Nong for each of the tax years 2010–11, 2011–12, 2012–13 and 2013–14.

Note: You should assume that the capital allowance rates for the tax year 2012–13 apply throughout. (7 marks)

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