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Accounting Period

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An accounting period is the fixed 12-month span your business uses to measure income and expenses for tax purposes. For most sole traders and small businesses, it matches your financial year, but you can set your own dates when you first start out.

At the end of each accounting period, you add up your profits and allowable expenses to calculate what you owe HMRC. If you ever change your accounting period, you’ll need to inform HMRC, as it can affect how your tax is worked out.

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