November 3rd, 2022Press Release
Allotts Business Update - Oct-Nov 2022
Start planning for accounting basis changes
Changes are coming for how self-employed individuals and partnerships calculate their taxable profits and return them to HMRC.
At present, the profits of a tax year are generally based on the profits of the accounting period ending in that tax year, with special rules for the opening and closing years of a business.
From the 2024/25 tax year, businesses will be taxed on the profits arising in that tax year, calculated by time-apportioning profits of theaccounting periods that fall within the tax year. Businesses that cannot finalise the accounts needed for the second part of the tax year in time will have to file returns based on provisional figures and revise them once final figures are available. Businesses can avoid this complication by changing their accounting date to 31 March or 5 April – both dates are treated as aligned with the tax year so avoiding apportionment.