FA06/SCH15/PARA4 allows an election to be made to accelerate the
normal charging period. Under the election an extra amount of
adjustment income is treated as arising in a particular tax year.
The election must be made before the first anniversary of the
normal filing date for a tax year and must show the amount of extra
adjustment income to be taxed in that tax year. In future years, if
there has been an election, the original adjustment income is
treated as being reduced by the amount charged early. For example
if £10000 is charged early because of an election the original
adjustment income is reduced by that amount when comparing one
third of that figure with one sixth of the profits.
For partnership elections see BIM74235 and BIM74240.
Under FA06/SCH15/PARA 13 the company can elect to bring forward
the adjustment income so that more of it is taxed in an accounting
period than would be required under the normal rules. In subsequent
accounting periods the calculations to determine the amount to
charge for each year are based on amounts which take account of any
elections which have been made – see above.
The election must be made on or before the first anniversary of the filing date for the accounting period for which the election is made.
For elections by partnerships involving companies see BIM74260.