BIM74060 - Abolition of the cash basis: first returns that are affected by the change

Cannot defer onset of the charge by extending period of accounts

The first tax Returns (and partnership Returns) on which instalments of the ’catch-up’ charge appeared were those for the year ended 5 April 2000, and the first payment on account of the charge was due on 31 January 2001 (i.e. it was not taken into account in calculating payments of account for 1999/2000).

It is not possible to defer the adoption of true and fair view and all of its consequences by extending a period of account that began before 6 April 1999. FA98/S42 (3) deems any account that began before 6 April 1999 and that was still current at 7 April 2000 to have ended at 6 April 1999 and a new account to have begun on 7 April 1999.