Taxation period of Sole Trader becoming Director of ltd company

bennyb86

New Member
Messages
1

I'm a sole trader and I am forming a ltd company and becoming a director to continue my business.

Accounts are to end of May.
First year of accounts 1/6/2011 -> 31/5/2012 (2012 Tax return)
Last year of accounts 1/6/2019 -> 30/4/2020 (2020 Tax return)

2019 Profit: 55,000
2020 Profit: 50,000

I have an accountant but I basically want to confirm what he's saying as it seems a bit odd to me. He says that when I do my income tax return for 2020, it will include the 50,000 profit + anything I earn from 1/5/2020 to 31/12/2020.

This would mean that for 2020 I will be taxed on 19 months of income (1/6/2019 -> 31/12/2020) as if it was 1 year
Is this correct?​
 

Ciru75

Frequent Poster
Messages
92
When you say "2020 profit: 50,000", is that the profit from 1/6/19 to 30/4/20? If so, the cessation of trade means that 50,000*4/11 = 18,182 is the assessable self employed profit for 2020. Your salary from the ltd company will be added to that to get your taxable income for the year.
 
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