4. taxing unincorporated businesses

What is the purpose of basis periods?

To link taxable trading profits to a tax year.

What is the tax year basis?

Business profits are assessed and taxed in the tax year in which they arise.

What dates does the 2025/26 tax year cover?

6 April 2025 to 5 April 2026.

How are businesses with accounting dates between 31 March and 5 April treated?

As if their accounting period aligns with the tax year.

Which accounting year is assessed in 2025/26 if accounts are prepared to 31 March 2026?

Year ended 31 March 2026.

Which accounting year is assessed in 2025/26 if accounts are prepared to 5 April 2026?

Year ended 5 April 2026.

What happens if a business has an accounting date that does not align with the tax year?

Profits from two accounting periods must be apportioned.

Kristiana has a 30 June year end. Which two accounts periods are used for 2025/26?

• Year ended 30 June 2025

• Year ended 30 June 2026

How are profits assessed when a business starts trading?

From the date of commencement to the following 5 April.

Rishi started trading on 1 August 2025. What period is assessed in 2025/26?

1 August 2025 to 5 April 2026.

when do tax returns need to filed

submitted by 31st jan in the next year

How are profits assessed on cessation of trade?

From 6 April to the cessation date.