Changing accounts year end to minimise tax

pauper79

Hello all. I help a relative to run a small business, including doing the accounts each year. The accounting year is same as the tax year, i.e. ends 5 April. Sadly the business doesn't really look viable in the future due to Covid, and my relative plans to close it and retire at some point this year. I wondered if changing the accounting year end (either bringing forward or postponing) could somehow be able to reduce the tax burden for Apr 2020 - Apr 2021. I thought I'd ask here before seeking professional advice because the business is very small so the fees make a bit of a dent. Thanks.

nick74

It is diffcult to answer this without seeing actual figures. If Covid has rendered the business unviable will there be any tax liability for 2020-21 anyway?

pauper79

Thanks. Yes, there was enough revenue plus government grants to tip over the personal allowance of £12.5k (she is a sole trader). But this tax year she will be well below, even if she worked the whole year.

nick74

If her taxable profit was only just over the personal allowance in the year to 5 April 2021 it may not be worthwhile changing anything? What income will she have once she retires, eg any private pension, state pension etc?