{"id":1437,"date":"2023-11-03T00:00:00","date_gmt":"2023-11-03T00:00:00","guid":{"rendered":"http:\/\/taxbak.co.uk\/index.php\/2023\/11\/03\/reporting-self-employed-profits-2023-24\/"},"modified":"2023-11-03T00:00:00","modified_gmt":"2023-11-03T00:00:00","slug":"reporting-self-employed-profits-2023-24","status":"publish","type":"post","link":"http:\/\/taxbak.co.uk\/index.php\/2023\/11\/03\/reporting-self-employed-profits-2023-24\/","title":{"rendered":"Reporting self-employed profits 2023-24"},"content":{"rendered":"<p>The basis of assessment reforms will change the way trading income is allocated to tax years. The changes will affect sole traders and partnerships that use an accounting date between 6 April and 30 March. There is no change to the rule for companies.<\/p>\n<p>The reforms will change the basis period from a &lsquo;current year basis&rsquo; to a &lsquo;tax year basis&rsquo;.<\/p>\n<p>Under the current rules there can be overlapping basis periods. When this occurs, tax may be charged on profits twice and generate &lsquo;overlap relief&rsquo;. This overlap relief can be used on the cessation of a business or when an accounting date is changed. The new method of using a &lsquo;tax year basis&rsquo; will remove the basis period rules and prevents the creation of further overlap relief.<\/p>\n<p>The new rules will come into effect in the 2024-25 tax year and the current 2023-24 tax year is known as the &lsquo;transition year&rsquo;. During the transitional year, all businesses&rsquo; basis periods will be aligned to the tax year and all outstanding overlap relief can be used against profits for that tax year.<\/p>\n<p>Affected businesses in 2023-24 will be assessed on the tax for profits for the:<\/p>\n<ul>\n<li>12 month accounting period they have previously been using; and<\/li>\n<li>for the rest of the 2023-24 tax year.<\/li>\n<\/ul>\n<p>Any excess profit covering more than 12 months, is known as &lsquo;transition profit&rsquo;. This can be reduced by overlap relief and the remaining profit will be spread over the next 5 tax years until 2027-28.<\/p>\n<p>The changes do not affect sole traders and partnerships who draw up annual accounts to a date between 31 March and 5 April. These businesses will continue to file as usual for the 2023-24 accounting year.<\/p>\n<!-- -->","protected":false},"excerpt":{"rendered":"<p>The basis of assessment reforms will change the way trading income is allocated to tax years. The changes will affect sole traders and partnerships that use an accounting date between 6 April and 30 March. There is no change to the rule for companies. The reforms will change the basis period from a &lsquo;current year [&hellip;]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"om_disable_all_campaigns":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[1],"tags":[],"class_list":["post-1437","post","type-post","status-publish","format-standard","hentry","category-uncategorized","blog-left-layout","blog-style-postblock","","blog-alt-odd"],"jetpack_sharing_enabled":true,"jetpack_featured_media_url":"","_links":{"self":[{"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/1437","targetHints":{"allow":["GET"]}}],"collection":[{"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/comments?post=1437"}],"version-history":[{"count":0,"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/posts\/1437\/revisions"}],"wp:attachment":[{"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/media?parent=1437"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/categories?post=1437"},{"taxonomy":"post_tag","embeddable":true,"href":"http:\/\/taxbak.co.uk\/index.php\/wp-json\/wp\/v2\/tags?post=1437"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}