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23 month basis period

Preferred way to enter 2 sets of accounts to SATR

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I am changing accounting date for sole trader from 30/04 to 31/03 in the 2020/21 SATR. There are 2 sets of accounts, one is 12months to 30/04/20, and the second is 11months to 31/03/21 = 23 months in total.

My question is, for the SATR would you:

a) Add both sets of accounts together for one single SEF1 page, and put a note to say it is 2 separate sets of accounts, or

b) Fill in 2 separate SEF1 pages, one for each set of accounts?

Have been advised either is acceptable, I'm inclined to go for adding it all together and adding notes, interested in others' views.

Replies (18)

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By David Ex
19th Oct 2021 15:26

Cfacc wrote:

Have been advised either is acceptable.

Who by, as a matter of interest?

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Replying to David Ex:
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By Cfacc
19th Oct 2021 16:19

HMRC - but a technical level, one who seemed pretty much on the ball.

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By pauld
19th Oct 2021 15:30

I would add together for one self employment page. Two pages would indicate two self employments? Hope there is some overlap relief?

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Replying to pauld:
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By Cfacc
19th Oct 2021 16:19

Yes, there is overlap.

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By thomas34
19th Oct 2021 16:02

Strictly an accounting period shouldn't exceed 18 months. There must be a reason but I've yet to find it. Over the years I've submitted two such 23 month accounts with no comeback and claimed all of the overlap relief available.

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Replying to thomas34:
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By Cfacc
19th Oct 2021 16:22

The accounting periods don't exceed 18 months, there are 2 sets of accounts, a 12 month and an 11 month.

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Replying to Cfacc:
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By lionofludesch
19th Oct 2021 16:35

Cfacc wrote:

The accounting periods don't exceed 18 months, there are 2 sets of accounts, a 12 month and an 11 month.

I wouldn't add them together if the business is continuing. If it isn't, you can do; that's the exception.

Wouldn't surprise me if HMRC accept your 23 month figures as few returns are checked but you do risk a Rupert Grint scenario if you can't be bothered. In reality, how much extra work is involved to do it correctly ?

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Replying to lionofludesch:
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By Cfacc
19th Oct 2021 16:52

Thanks LionofLudesh. The business is continuing and I've done all the work already, I can enter it either way, I'm mainly concerned to get it right.

So you would do it as 2 separate pages would you? And would you split the basis period to match?

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Replying to Cfacc:
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By lionofludesch
19th Oct 2021 17:05

Cfacc wrote:

Thanks LionofLudesh. The business is continuing and I've done all the work already, I can enter it either way, I'm mainly concerned to get it right.

So you would do it as 2 separate pages would you?

Yes.

Quote:
And would you split the basis period to match?

Split the basis period ? In what way ?

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Replying to lionofludesch:
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By Cfacc
19th Oct 2021 17:43

As in if I do 2 separate SEF pages, one for each set of accounts, what basis period do I put on each of the pages? Is it the whole 23 months as the basis period on both pages, or split it to match the accounts period for each page.

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Replying to Cfacc:
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By lionofludesch
19th Oct 2021 17:57

Cfacc wrote:

As in if I do 2 separate SEF pages, one for each set of accounts, what basis period do I put on each of the pages? Is it the whole 23 months as the basis period on both pages, or split it to match the accounts period for each page.

Ah right, well, not entirely sure what you mean but, last time I did it, I entered it as two entirely separate periods, assessable in the same tax year. In the past, I've also made an entry in the "Adjustment to profits" box, + on one form and - on the other, so that one form said nil and the other the whole 23 months profis.

Both methods were accepted. But, then again, they probably weren't scrutinised very closely.

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Replying to lionofludesch:
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By Cfacc
19th Oct 2021 18:55

I'll go with the easier option of 2 separate periods assessable in the same tax year. And see what happens.

That's all been very helpful, thankyou.

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Replying to lionofludesch:
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By The Dullard
19th Oct 2021 17:05

EDIT: No, I forgot the point in Grint. I agree that you could end up with a failed change of accounting date. Thus prepare two sets of accounts pages, which doesn't, necessarily, indicate two self-employments as has been suggested.

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Replying to The Dullard:
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By lionofludesch
19th Oct 2021 17:03

The Dullard wrote:

With a change from 30 April to 31 March, Grint has no bearing, because the answer is going to be the same however the accounts are prepared (11+12, 12+11 or all 23 will all give the same total profits assessable, with 11 months overlap relief)

Except that 11+12 will cause overlap to crystallise in the year before the 12+11 scenario.

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Replying to lionofludesch:
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By The Dullard
19th Oct 2021 17:08

No. In 11+12 or 12+11 the whole 23 months profits are assessable in the same tax year that the 11 months of overlap relief are given.

However the 23 months pushes the change of accounting date and thus the overlap relief into the next tax year. I've edited my earlier response.

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Replying to The Dullard:
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By lionofludesch
19th Oct 2021 17:30

The Dullard wrote:

No. In 11+12 or 12+11 the whole 23 months profits are assessable in the same tax year that the 11 months of overlap relief are given.

That's true. It's a different 12 being added to the 11.

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Replying to thomas34:
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By lionofludesch
19th Oct 2021 16:36

thomas34 wrote:

Strictly an accounting period shouldn't exceed 18 months. There must be a reason but I've yet to find it.

Have a look in ITTOIA. It's in there somewhere.

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Replying to lionofludesch:
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By lionofludesch
19th Oct 2021 17:04

lionofludesch wrote:

thomas34 wrote:

Strictly an accounting period shouldn't exceed 18 months. There must be a reason but I've yet to find it.

Have a look in ITTOIA. It's in there somewhere.

Section 217.

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