Reporting profit for 2023 to 2024

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The fiscal period spanning from 2023 to 2024 is referred to as the ‘transition year.’

When filing your Self Assessment tax return, it is necessary to declare profits earned from the day following your accounting year end in 2022 to 2023, up until April 5, 2024.

Key points to consider:

  1. You will be reporting profits that span more than one year.
  2. It might be necessary to allocate two sets of accounts to estimate your profits for the year.

For instance, if your accounting year ends on December 31, 2022, you should report profits from January 1, 2023, to April 5, 2024, in the 2023 to 2024 tax year.

If your profit reporting covers a period exceeding 12 months, the surplus is termed ‘transition profit.’ Overlap Relief can be applied to reduce this, and any remaining profit will be distributed over the subsequent years, extending up to the tax year 2027 to 2028.

To report the profits for the tax year associated with your return (from April 6 to the following April 5), follow these guidelines:

  1. If your accounting year end falls between March 31 and April 5, include the figures from these accounts in your return as usual.
  2. If your accounting year end is outside the range of March 31 to April 5. Report parts of the profit from two sets of accounts. Combine the profit from:
    • April 6 to your business account year end date
    • The start of your new business year to April 5 of the following year

For instance, if your accounting year end date is December 31, report profit from both:

  • April 6, 2024, to December 31, 2024
  • January 1, 2025, to April 5, 2025

The standard method for apportioning profits is by considering the number of days in each period within the tax year. However, you can use an alternative method if it is reasonable and consistently applied. For example, apportioning by months or weeks is acceptable.