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HMRC internal manual

Business Income Manual

Computation of liability: contents

This chapter explains how profits chargeable to Income Tax are computed. Profits are calculated with reference to a period of account which may not correspond with a tax year. There are rules to determine which period or periods will form the basis for the charge to tax for a particular year. The legislation on basis periods is in S196-S220 Income (Trading and Other Income) Act 2005.