When do increases in CT take effect

**philip@wellwoodhoyle** · 3 April 2007, 08:39

The profits for a year straddling two different tax rates are pro-rata'd according to the number of days in each. So if your year end was 30 September, the profits for the year would be halved, half tax at the tax rate pre 1 April and the other half at the tax rate post 1 April. The accounts aren't properly split between the two periods according to the dates of the transactions, so your suggestion would have no effect.

What may work if the figures were large enough would be to change your year end to 31 March, so that profits were always taxed at the "right" rate. This would only be beneficial if your profits for the period before the increase were significantly higher than the profits after the date of the increase.

**boredsenseless** · 3 April 2007, 08:39

Originally posted by Limited

if my company year runs from October but CT is increasing 1% a year from April, does my accountant have to work out profit from each half of the year for the different tax rates or does the higher tax rate apply for the whole year?

I have to send out a few invoices this week and I'm wondering if it makes any difference if I do it tomorrow or on Thursday.

I'm sure the sums involved are small - just curious really

Its pro-rata over the number of days.

For example if your company year and was Sept 30th you would have 180ish days in the 19% bracket and 180ish days in the 20%. The exact expense or income date is irrelevant

**Limited** · 3 April 2007, 08:47

thanks for replies

When do increases in CT take effect