C1Part 3Trading income
Chapter 14Adjustment on change of basis
Adjustment on change of basis
180Application of Chapter
1
This Chapter applies if—
a
a company carrying on a trade changes, from one period of account to the next, the basis on which profits of the trade are calculated for corporation tax purposes,
b
the old basis accorded with the law or practice applicable in relation to the period of account before the change, and
c
the new basis accords with the law and practice applicable in relation to the period of account after the change.
2
The practice applicable in any case means the accepted practice in cases of that description as to how profits of a trade should be calculated for corporation tax purposes.
3
A company changes the basis on which profits of a trade are calculated for corporation tax purposes if the company makes—
a
a F1change of accounting policy (see subsection (4)), or
b
a change in the tax adjustments applied (see subsections (5) and (6)).
F24
A “change of accounting policy” includes, in particular—
a
a change from using UK generally accepted accounting practice to using generally accepted accounting practice with respect to accounts prepared in accordance with international accounting standards, and
b
a change from using generally accepted accounting practice with respect to accounts prepared in accordance with international accounting standards to using UK generally accepted accounting practice.
5
A “tax adjustment” means any adjustment required or authorised by law in calculating profits of a trade for corporation tax purposes.
6
A “change in the tax adjustments applied”—
a
does not include a change made in order to comply with amending legislation not applicable to the previous period of account, but
b
includes a change resulting from a change of view as to what is required or authorised by law or as to whether any adjustment is so required or authorised.
Pt. 3 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 4(1)