Change of basis period - go now?

Preparation for MTD

Didn't find your answer?

Bit confused as to whether a change in basis periods now (in the 2022-23 tax year) rather than the 2023-24 formal MTD transition year? 

Presumably the 18 month and commercial reason constraints would apply.  We would only choose to do this for businesses who would benefit from the overlap relief now (anyone who would effectively bring a tax bill forwards we would leave until the 2023-24 transition year). But saving tax (which is effectively what we're doing) isn't a commercial reason.  So what are other satisfactory commercial reasons? 

We're interested in how other practices are handling this please? 

TIA!

Replies (10)

Please login or register to join the discussion.

RLI
By lionofludesch
22nd Feb 2023 12:19

If you change to 5 April 2023, I can guarantee you'll have no bother because that's what HMRC want you to do. Have you had a change within the last five years ? If not, you can change anyway.

If the period is over eighteen months, simply do two sets of accounts, one for twelve months, the other for the rest.

Whether you should is a different matter. Most importantly, there'll be no spreading over five years so there'll be a very limited number of cases who will benefit.

I'd be more likely to move the accounting date a couple of months or so in 2022/23 and then the mandatory move in 2023/24, which would give you a spread over six years rather than five.

But every case is different and you won't have enough information to be sure as you'll need the 2027/28 accounts.

Thanks (0)
avatar
By ABC12
22nd Feb 2023 12:33

Don't want to be THAT pedantic but it's nothing to do with MTD anymore.

Thanks (1)
Replying to ABC12:
RLI
By lionofludesch
22nd Feb 2023 12:46

ABC12 wrote:

Don't want to be THAT pedantic but it's nothing to do with MTD anymore.

It never did.

No reason at all why overlap relief couldn't have coexisted with MTD.

Thanks (0)
avatar
By jesue
24th Oct 2023 11:21

Hi
I want to change to 5 April 2023 - is this right? my accounting period will only cover 8 months and going forward that will be 12 months .
is this right?

Thanks

Thanks (0)
Replying to jesue:
RLI
By lionofludesch
24th Oct 2023 11:56

jesue wrote:

Hi
I want to change to 5 April 2023 - is this right? my accounting period will only cover 8 months and going forward that will be 12 months .
is this right?

Thanks

Sort of. You'll need to include accounts for the two periods to 31 July 2022 and 5 April 2023. You can deduct your overlap relief.

You'll also give up the opportunity to spread your excess profits over five years.

Up to you, obviously. It's complicated and there are several options.

Thanks (1)
Replying to lionofludesch:
avatar
By jesue
24th Oct 2023 12:34

first period was completed for the period 2021/2022 . my thinking is for 2022/2023 only submit from august 2022 to 05 April 2023 . this will help to have the right period for 2023/2024.
is this right or not?

thanks

Thanks (0)
Replying to jesue:
RLI
By lionofludesch
24th Oct 2023 13:25

jesue wrote:

first period was completed for the period 2021/2022 . my thinking is for 2022/2023 only submit from august 2022 to 05 April 2023 . this will help to have the right period for 2023/2024.
is this right or not?

thanks

No.

Thanks (1)
Replying to lionofludesch:
avatar
By mumpin
24th Oct 2023 12:49

Never mind that Lion, get over to the BBC site:

Cumbria: A66 brought to a standstill by escaped llamas and alpacas

Thanks (0)
Replying to mumpin:
RLI
By lionofludesch
24th Oct 2023 13:24

Is that at Mainsgill?

Thanks (0)
Replying to lionofludesch:
avatar
By mumpin
24th Oct 2023 13:41

Near Troutbeck it says. There's a video:

https://www.bbc.co.uk/news/av/uk-england-cumbria-67203719

Thanks (0)