Self Assessment and Basis Period Reform - How Hard is it to understand?

Maharishi

Hi Forumites,  I'll keep it brief as possible;

Sole Trader who has been filing own returns since my Accountant retired.
Basis Period for me is 18 June to 17 June.
Now I see that my upcoming return will need to pull this round in line with normal tax year and so will involve an extra period from 18 June 23 to 5 April 24.

Q1 - Is this something that I can safely undertake myself without assistance given that I have been filing for around 7 years under my own steam?
Q2 - Is there a well laid out guidance on the web that will assist me?

My retired accountant told me of this change when I rang him to arrange a chat next week, (tea and a biscuit as I haven't seen him for ages), and is now suspicious of my motive for the meet even though I had zero idea of this impending occurrence.  LOL.

Thank you, as always.

Bookworm105

was 18th June the date you started this sole trader business and therefore has it always done its tax return to 17th June each tax year to date?

the change in basis period will cause what is termed "overlap profits"
you need to read around that subject, and if the business has had different dates in thw past, ask your accountant if overlap profits have been declared and, crucially, relived in the past.

Changes to reporting income from self employment and partnerships - GOV.UK (www.gov.uk)

Get your Overlap Relief figure - GOV.UK (www.gov.uk)

Maharishi

Bookworm105 said:

was 18th June the date you started this sole trader business and therefore has it always done its tax return to 17th June each tax year to date?

the change in basis period will cause what is termed "overlap profits"
you need to read around that subject, and if the business has had different dates in thw past, ask your accountant if overlap profits have been declared and, crucially, relived in the past.

Changes to reporting income from self employment and partnerships - GOV.UK (www.gov.uk)

Get your Overlap Relief figure - GOV.UK (www.gov.uk)

Yes Bookworm, the accounting basis period has been 18/6 - 17/6 since 30 years.

I have been carrying forward something called "overlap relief" (I think) every return - around £4300 - so I am guessing that when I do the "transitionl part" - 18/6/23 to 5/4/24 - that is where that figure will get used?

In my mind, at present, I am thinking that I need to do a normal year to 17/6/23 and then a partial year from 18/6/23 to 5/4/24 to bring it into line with the usual accounting dates moving forward.  I imagine that I only get personal allowances for the normal year but can claim usual incurred expenses for the partial.  I did downlaod a paper return to see what new boxes there were.  Little bit confusing in a couple of places but I suppose that when you fill it out online, it gives you a calculation before you hit "submit" and if that looks out of line with what you were expecting to see then you can go back and look for errors?

Thank you for the links.

Bookworm105

as you are reporting your taxable income for Apr 23 to Apr 24 then yes you will obviously only get one personal allowance for the tax year 23/24

when you did the previous year's return (22/23) it contained your 12 months ending June 22 and you got the allowance for 22/23 against that taxable profit

but for 23/24 your taxable profit will cover 18 Jun 22 - 17 June 23 and the entire transition period 18 June 23 to 5 April 24. Hence the need to claim any overlap relief if you can. It can be a complex area, so if you can "persuade" the old accountant that he does want a bit of pin money for working whilst retired that may be the easier option. 

Maharishi

Bookworm105 said:

as you are reporting your taxable income for Apr 23 to Apr 24 then yes you will obviously only get one personal allowance for the tax year 23/24

when you did the previous year's return (22/23) it contained your 12 months ending June 22 and you got the allowance for 22/23 against that taxable profit

but for 23/24 your taxable profit will cover 18 Jun 22 - 17 June 23 and the entire transition period 18 June 23 to 5 April 24. Hence the need to claim any overlap relief if you can. It can be a complex area, so if you can "persuade" the old accountant that he does want a bit of pin money for working whilst retired that may be the easier option. 

When we have a chat over tea on Wednesday I will gently pick his brain over the grey area(s).

Thank you very much indeed.