Calculate the following tax question, using Lymer & Oats:2022/23 Tables of tax rates and allowances.

Chatru commenced trading on 1^st November 2016. His fir accounts were made up to 30^th April 2018 and thereafter to 30^th April annually. He ceased trading on 31^st March 2021. His trading result, adjusted for income tax purposes were:

                                                                                                £

1^st November 2016-30^th April 2018                                        40,500

Year ended 30^th April 2019                                                     12,000

Year ended 30^th April 2020                                                     24,000

Period to 31^st March 2021                                                      46,000

Requirements:

a) Calculate the assessable income for all years in question.

 

b) Calculate whether there would have been an income tax benefit in Chatru continuing to trade one extra month and making up final accounts to his normal accounting date, on the assumption that his tax adjusted profit for April 2021was £4,200.

Answer rating: 100% (QA)

To calculate the assessable income for each year and determine the income tax benefit we need to apply the relevant tax rates and allowances for each ... View the full answer