We are sharing this update from ACCA, our professional body, for the interest of clients and contacts. The content is (c) ACCA
The well-known term in tax is going to be consigned to history from April 2024
From this date sole traders and partnerships will be taxed on their net profits earned for the ‘tax year basis’ ie from 6 April to the following 5 April each year.
We shared step-by-step guidance in a previous article for the implementation of changes in basis period for sole traders and partnerships and its transition for tax year 2023/24, which is just around the corner for practitioners.
You can also listen to this free webinar delivered by Paul Soper in April 2023, which summarises the practicalities of basis period reform – what the changes will be, who it affects, and the transitional rules.
A key impact of one of the changes in accounting period is allowing the taxpayer to claim overlap profit relief. The HMRC Manuals include a number of examples of changes in accounting period and how to claim overlap relief, which can be found below:
How to get your overlap profit figure
To claim your overlap profit, you need to know your overlap profit carried forward – which may already be entered on a previous self-assessment return form through:
- trading income on self employment (SA103)
- trading income on partnership (SA104)
- both trading income on self employment and partnership.
If you do not know your overlap relief figure – and you cannot find it on your previous self assessment returns- you will need to contact HMRC