Section 7A | Apportionment etc of profits to tax year

(1)This section and sections 7B to 7D apply if a period of account of a person carrying on a trade (“the trader”) does not coincide with a tax year.

(2)Any of the following steps may be taken if they are necessary in order to arrive at the profits or losses of the trade of the tax year—

(a)apportioning the profits or losses of a period of account to the parts of that period falling in different tax years, and

(b)adding the profits or losses of a period of account (or part of a period) to profits or losses of other periods of account (or parts).

(3)The steps must be taken by reference to the number of days in the periods concerned.

(4)But the trader may use a different way of measuring the length of the periods concerned if—

(a)it is reasonable to do so, and

(b)the way of measuring the length of periods is used consistently for the purposes of the trade.

(5)Sections 7B and 7C contain rules for the purpose of avoiding the need to apportion profits or losses under this section (and section 7D makes provision for the trader to elect for those rules not to apply).

(6)This section and sections 7B to 7D apply to professions and vocations as they apply to trades.