Important update for sole trader and partnership businesses
Dafferns Chartered Accountants and Business Advisers
A full service accounting firm based in Coventry and Warwickshire with national and international reach.
Starting with the self-assessment return due by 31 January 2025 (covering the tax year 2023 to 2024), all sole trader and partnership businesses are now required to report their profits on a tax year basis.
The key changes are:
1. Reporting period shift: Businesses must report profits based on the tax year, beginning with the 2023 to 2024 tax year and onwards.
2. Transitional reporting: For businesses with previous accounting periods different from the tax year, profits from the end of the last accounting period (up to 5 April 2024) must be declared. Any additional profit after overlap relief will be considered transitional profit.
3. Spread of transitional profit: The transitional profit will be spread over five years, including the 2023 to 2024 tax year.
4. Equivalent treatment: Accounting periods ending on 31 March will now be treated the same as those ending on 5 April.
For more information, or if you have specific questions or concerns regarding these changes please contact Scott Whitmore .