Test your understanding: answers
(1). Mizo adopts a 31 May year end.
1. Profit for each trading period
| £ | |
|---|---|
| Nine months ending 31 May 2025 (£4,000 x 2) + (£3,000 x 5) + (£6,000 x 2) | 35,000 |
| Year ending 31 May 2026 (£6,000 x 4) + (£10,000 x 8) | 104,000 |
2. Taxable trading profit for the first two tax years
| £ | |
|---|---|
| 2024/25 (1 September 2024 to 5 April 2025) (7/9 x £35,000) | 27,222 |
| 2025/26 (6 April 2025 to 5 April 2026) ((2/9 x £35,000) + (10/12 x £104,000) | 94,444 |
