Test your understanding
(1). Nora began trading on 1 May 2022. Her first few months of trading were very profitable but since then her monthly profits have been gradually falling.
Explain the relevance of this information to Nora’s choice of year end.
(2). Mizo began trading on 1 September 2022. His tax adjusted profits per month are set out below.
| £ | |
|---|---|
| September to October 2022 (two months) | 4,000 |
| November 2022 to March 2023 (five months) | 3,000 |
| April to September 2023 (six months) | 6,000 |
| October 2023 onwards | 10,000 |
If Mizo adopts a 31 May year end, what will be his taxable trading profit for the first two tax years of trading?
