ECL26700 - ECL example: accounting period ending within 3 months of the end of the financial year, regulated for only part of the financial year
If there is no accounting period which ends within the financial year, you must instead use the accounting period which ends within 3 months of the end of the accounting period. If the person is regulated for only part of the financial year, the ECL liability is reduced (see [ECL25000])
Beta Ltd’s first accounting period ends of 30 April 2027, so there is no accounting period ending within the 2026/27 financial year. S56(5)(a) therefore applies. The relevant AP is taken as the AP that ends during the period of 3 months beginning with the end of the financial year 1 April 2026 to 31 March 2027. The relevant AP is therefore the 12 months from 1 May 2026 to 30 April 2027.
Beta Ltd was, however, only a regulated business from 1 January 2027, which is 90 days from the end of the financial year on 31 March 2027. Beta Ltd’s ECL liability is apportioned on the daily basis, using 90/365 multiplied by the band range liability.
Beta Ltd’s UK revenue of £15m puts it within Band A. Ordinarily, the ECL liability would be for £10,200, but this must be adjusted as Beta Ltd was only carrying on a regulated business for part of the financial year.
Because Beta Ltd was only regulated for 90 days, the levy is apportioned on a daily basis 10,200 * [90/365]), which means Gamma Ltd has an ECL liability of £2,515.