Part 3

Trading income
Chapter 14

Adjustment on change of basis

Adjustment on change of basis

Giving effect to positive and negative adjustments
181
1
An amount by way of adjustment must be calculated in accordance with section 182.
2
If the amount produced by the calculation is positive—
a
the amount is brought into account as a receipt in calculating the profits of the trade, and
b
the receipt is treated as arising on the first day of the first period of account for which the new basis is adopted.
3
If the amount produced by the calculation is negative—
a
a deduction is allowed for the amount as an expense of the trade in calculating the profits of the trade, and
b
the expense is treated as arising on the first day of the first period of account for which the new basis is adopted.
4
This section is subject to—
a
section 183 (no adjustment for certain expenses previously brought into account),
b
section 184 (cases where adjustment not required until assets realised or written off), and
c
section 185 (change from realisation basis to mark to market).
Pt. 3 modified (1.1.2010) by Northern Rock plc (Tax Consequences) Regulations 2009 (S.I. 2009/3227), regs. 1, 4(1)