Basis period reform 

2023/24 is a transition year in the move from basis periods to the tax year basis for sole trader and partnerships businesses. This may make preparing the tax return for 2023/24 more complicated where the business has a non-tax year accounting period, for example, 30 April. 

In this case, the return must include the results of: 

• the 12 months following the end of the basis period for 2022/23 (the standard part); and 
• the period from the end of the standard part to 5 April 2024 (the transition part). An equivalence rule treats 31 March-4 April as 5 April where accounts are made up to 31 March-4 April. 

Any overlap profits brought forward are deducted in calculating the profit or loss for the transition part. If there is a profit for the transition part, it is spread in equal parts over five tax years starting with 2023/24, unless the person elects otherwise.  

How to obtain overlap information 

Details of overlap profits can be requested online from HMRC, including by agents. HMRC’s guidance explains how to use the service, including the information that the person or agent will need to provide, and how HMRC will respond to the request. The status of a request can be checked using HMRC’s Where’s my reply tool.   

Recently, HMRC reported that it has seen “a major increase in demand” for the service, and as a result response times are not as quick as HMRC would like. To help it manage demand in the run-up to the 31 January 2025 deadline for online submission of 2023/24 tax returns, HMRC has asked that taxpayers and agents:

• do not contact HMRC directly to request overlap information, or to check when they will get a reply. The online services should be used, as set out above;   
• only use the service where necessary. HMRC says that the service is not intended for to be used to check a figure that the taxpayer or agent already has; and
• submit all requests for overlap information by 31 December 2024 where possible.

Further information from ICAEW

• TAXguide 02/22: Basis period reform
• Recorded webinar: Basis period reform update
• TAXline article: Basis period reform: what you need to know