Change of year end

[trg]

Hi folks, just wondering regarding changing a year end.

If you change from 31/Dec to 30/Jun and 18 months accounts from 01/01/15 to 30/06/16 & profit for the period is €18,000....I think the profit assessable in 2015 is 12/18 i.e. €12,000. Please correct me if I'm wrong.

What is the assessable profit in 2016?

 

[Daenis]

I think it is 18,000 (as this is the profit in the accounting period ending in 2016) and can then be revised when you do your accounts for the accounting period 01/07/2016 - 30/06/2017 to actual basis if lower i.e. 6/18 of the 18,000 and 6/12 of whatever the 2016-2017 profit is. If the actual basis is higher it stays at the 18,000.

 

[Joe_90]

The assessable profit for 2016 is €12,000 i.e. 12 months ending in the tax year.

 

[trg]

The assessable profit for 2016 is €12,000 i.e. 12 months ending in the tax year.

That's what I thought tbh but wasn't sure. Struck me as odd that it'd be the same assessable profits in 2015 and 2016.

 

[Daenis]

yes 12,000 sorry mixing up my change of accounting year end and commencement rules. Its only the same because of the dates and example you used.

 

[T McGibney]

I presume this query arises in respect of a sole trader?

Why on earth would you want to change your year end from 31 December (which tallies with the tax year) to 30 June?