Meg is an unincorporated sole trader. She requires advice regarding a planned change of accounting date.

Meg:
– Is 60 years old and is married to Laurie.
– Owns an unincorporated sole trader business, MT Travel.
– Has rental income of £8,600 each year in addition to any profits from MT Travel.

MT Travel:
– Was set up by Meg on 1 January 2012.
– Has had accounts prepared to 31 December annually.
– Generated overlap profits of £7,400 on commencement.
– Meg will change its accounting date to 31 March by preparing accounts for the 15 months ending 31 March 2018.

MT Travel – recent and forecast tax-adjusted trading profits:

Required:
(a) (i) Calculate the taxable trading profit of MT Travel for each of the tax years 2016/17 and 2017/18 before considering relief for the anticipated trading loss of the tax year 2018/19. (3 marks)

(ii) Identify and explain ONE practical tax disadvantage of MT Travel having a 31 March year end, rather than a 31 December year end. (2 marks)