- 3rd November 2021
- Posted by: admin
- Category: News
The national press is starting its usual round of biting commentary on a recent budget. They have even picked up on the forthcoming change to an actual year basis of assessment when the self-employed – with a year-end other than 31 March or 5 April – will need to transition to an actual year basis, at latest by 2023-24.
From April 2024, all self-employed traders will be taxed on actual profits arising in a tax year.
Which means professional advisers will need to utilise any unused overlap relief when the transition is made.
Firms would be wise to check and see if they have a record of this overlap number.
Consider self employed clients you have acquired in recent years with non-tax year ends. Did their previous accountants advise you of any unutilised overlap relief?
If you are still acting for businesses that commenced trade many years ago, do you have a record of overlap profits, will this require a search in the archives?
Will you be receiving requests from the advisers of affected clients who took over cases from you in the distant past, for overlap numbers?
And if your records prove to be inadequate, will HMRC’s records provide the missing information?
Practitioners will no doubt be thinking of ways to minimise the impact of this change, perhaps considering a move to an actual year basis prior to the 2023-24 transitional year?
Which raises another question, will clients see the value of this planning work and pay the fee?
Source: New feed