释义 |
profits pl. n. Income tax on an individual’s trading income or property income is charged on “profits”: corporation tax is charged on the “total profits” of a company. However, in contrast to the approach taken in a number of Continental countries, the UK Taxes Acts do not provide a formulation of the measure of profit. Instead, the Income Tax (Trade and Other Income) Act 2005 s 25 and the Corporation Tax Act 2009 s 46 both state that “the profits of a trade must be calculated in accordance with generally accepted accounting practice” (unless the business is not incorporated and the turnover is less than £150,000, when an election can be made to construct accounts on the cash basis: Income Tax (Trading and Other Income) Act 2005 ss 31B and 271A). This aligns the base for calculating tax with the requirement in Companies Act 2006 s 396 that a company’s accounts must give a true and fair view of the state of affairs of the company. Financial Reporting Standards are issued, inter alia, to specify how to compute transactions that form part of the calculation of profits. See also accounting practice. |