Financial Year Basis Period Reform
Please be aware, HMRC have implemented reforms to the basis period method for taxation, which applies to unincorporated businesses and limited liability partnerships (LLPs), with effect from 6 April 2023. These changes will affect all sole traders, unincorporated partnerships and LLPs that currently do not prepare their annual accounts to a reference date ending between 31 March and 5 April.
The new rules dictate that, from 2024/25, all unincorporated businesses will be taxed on the profits generated between the start and end of the tax year, from 6 April to 5 April. This will apply regardless of the year-end that the business prepares its accounts to. For more information on how this change will affect you please click here.
HMRC will allow a year-end that falls between 31 March and 5 April to be treated as if it falls at the end of the tax year. With these changes you should consider whether changing your business’ accounting year-end to 31 March would be beneficial. If you are unsure if/how this affects you please speak to your accountant or HMRC for further advice.
If you do wish to amend your financial year structure in Platinum going forward, please contact our support team who will be able to assist you with this.