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I am currently studying level 3 self assessment to add it to my practice licence. I have also just sat AAT Level 4 Personal Tax to complete my AAT Qualification last week so doing the SA unit while it is still fresh in my head, however Ihave a query as below:-
In the AAT Personal Tax unit and in the past when completing my own SA Returns while a director I was taught that all employment income (and Social Security and Pension Income) was treated under the receipts basis for tax return basis.
i.e. it did not matter what date the bonus related to it was treated as assessable in the tax year it was received. If a bonus covered January 2010 to December 2010 and was not paid until 30th April 2011 then it was on the P60 for 2011/12 and entered into the tax return for 2011/12 not 2010/11.
Yet in the ICB manual it states that the bonus is assesed in the period it is decided it is due or when paid , whichever is earlier and the example is as above yet is caclulated as being entered into the 2010/11 tax return even though not paid until 30th April 2011. This means the P60 for each tax year will not tie into the Tax Return for 2 years 2010/11 and 2011/12.
Which method is correct for the sake of the exam?
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