2023/24 is a transition year in the move from basis periods to the tax year basis for sole trader and partnerships businesses. As part of this, any overlap relief brought forward from earlier periods must be used in 2023/24. 

The overlap relief figure may be entered as overlap profit carried forward on a previous ITSA return. If not, the individual or their agent can use HMRC’s new online tool to work out their overlap relief figure.  

To do this they will need information from their business records, including the date their business started or the date they joined the partnership. HMRC says that the person should use “reasonable estimates” if they do not have all the information required.  

It is also possible to request the overlap relief figure from HMRC. ICAEW explained how to do this in a recent article. HMRC has asked that all taxpayers and agents wishing to use this service do so by 31 December 2024 to help it manage demand.  

If HMRC does not hold an overlap relief figure, it will provide information that will help the taxpayer or their agent to calculate the figure, with the option of using HMRC’s new calculator.  

Further information from ICAEW: 

• Detailed guidance: TAXguide 02/22: Basis period reform 
• Article: Basis period reform: what you need to know
• Recorded webinar: Basis period reform update