Basis periods if accounting date is changed
23/06/2020

The assessment of self-employed or partnerships profits is usually relatively straight-forward if the accounting date, to which annual accounts are prepared, falls between 31 March and 5 April. However, overlap profits can arise where a business year end date is not coterminous with the end of the tax year.

Overlap profits can happen in the first 3 years of the business or in any year in which there is a change of basis period (due to a change of accounting date).

HMRC’s guidance lists the following information about a change of accounting date:

If your accounting date in 2018 to 2019 is more than 12 months after the end of the basis period for 2017 to 2018, your basis period is the period between the end of the basis period for 2017 to 2018 and the new accounting date.

For example, your basis period for 2017 to 2018 ended on 31 May 2017 and the new accounting date is 31 August 2018 – your basis period is the 15-month period 1 June 2017 to 31 August 2018.

If your accounting date in 2018 to 2019 is less than 12 months after the end of the basis period for 2017 to 2018, your basis period is the 12 months ending on the new accounting date.

For example, your basis period for 2017 to 2018 ended on 31 December 2017 and the new accounting date is 31 July 2018 – your basis period is the 12-month period 1 August 2017 to 31 July 2018.


About Us

We are chartered accountants and registered auditors established in 1946, we have been based in Staplefield near Haywards Heath since 2004. With a client base throughout the southeast, our location is the focal point between Crawley, Horsham and Haywards Heath and Brighton.

Find out more...

Legal

The information contained on this website is provided by Carter Nicholls Ltd for general guidance and is aimed to offer the user general information only. Before making any decision or taking action, you should seek professional advice from a professional from Carter Nicholls or another qualified professional.

Read more....

Contact Us

Carter Nicholls Limited
Victoria House, Stanbridge Park, Staplefield Lane
Staplefield
West Sussex
RH17 6AS

info@carternicholls.co.uk
01444 401440

JUMP TO TOP