HMRC have advised that sole trader and partnership businesses and their agents will soon be able to use an online form to request details of overlap relief available for offset during the transition to the new tax year basis period rules.

From 2024-25, all unincorporated businesses will be taxed on their profit or loss arising in the tax year, regardless of their accounting end date.

  • The 2023-24 tax year is a transitional year for businesses whose year-end is not coterminous with the tax year or not deemed to be, i.e. they have a year-end earlier than 31 March.
  • These businesses will be subject to a special profit catch-up rule but will also be able to claim overlap relief against their 2023-24 taxable profits.

Currently, there is no formal process in place for requesting details of overlap profits and businesses and their agents can only request this information by calling HMRC or writing to them.

  • From 29 August 2023, there will be an online form available on the gov.uk website which will hopefully streamline and speed up the process of obtaining this information.
  • The form will not be just for the 2023-24 transitional year and can also be used to request overlap relief details if there is a change of accounting period in 2022-23.

Useful guides on this topic

Basis Period reform
What is basis period reform? Who is affected? What is the new basis year for tax? What are the transitional rules?

Accounting periods and tax basis periods
Which date do I choose? Does it matter? Can I change my accounting date?  What changes are proposed as a result of the reform of basis periods?

Source: ICAEW


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