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LLP First Tax Return Basis period overlap


One of my client started LLP on 17/02/2016.Now I am preparing the LLP accounts & tax return.I am bit confused of the overlap period. The question is:

a) 2015/16 Return period covers 17/02/16 to 05/04/16  &

b) 2016/17 second return period will cover 01/03/16 to 28/02/17 to cover 12months OR it will  start from 17/02/16 to 28/02/17.

& Partners will  file their SA return for 2016/17 or they will need to file 2015/16 SA return as well.


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18th Oct 2017 12:29

If you're preparing accounts to 28th February 2017, the second year's assessment will be based on the twelve months ended 28th February 2017.

The overlap period is the bit included in both years, 1st March 2016 to 5th April 2016.

Partners will need to file SA returns for the years in which they were partners.

However, I would always recommend a partnership to have a 31 March (or 5th April) year end. It's a lot easier in the long run - especially if there are likely to be changes in personnel.

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to lionofludesch
18th Oct 2017 12:43

Many thanks for clarification of LLP return period.Yes there is overlap period 01/03/16 to 05/04/16.
Legally they are partners for 2015-16 as started partnership on 17/02/16 so for LLP return of period 17/02/16 to 05/04/16, individual partners also need to file SA return.

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18th Oct 2017 13:08

Thanks lionofludesch for your reply.

I think for 2017/18 tax return there won't be any overlap as it will cover the period 01/03/17 to 28/02/18.
I cant foresee any changes in partners as both husband & wife are LLP partners.

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to @inforubina
18th Oct 2017 13:14

Er, no.

There won't be any overlap relief until the year end changes.

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18th Oct 2017 14:08

Then i think i should speak to client to change the accounting reference date to 31/03/2017 as accounts filing date to CH is not over due.
Then possibly the tax return period would be
17/02/16 to 05/04/16 & 01/04/16 to 31/03/17.

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to @inforubina
18th Oct 2017 16:00

That in theory gives you 5 days overlap 1-5/4. Just apportion 365 to 16-17 and the balance to 15-16

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to Paul D Utherone
18th Oct 2017 16:50

I'd go for 31 March 2016. 31 March or 1-4 April counting as 5th April is enshrined in the legislation somewhere.

Thanks (1)
19th Oct 2017 13:28

Yes i find the basis period legislation for 1 to 4April.

"Accounting dates in the period 31 March and 4 April:
The basis period for the tax year in which a business starts (year 1) usually ends on 5 April. However, if a new business chooses an accounting date of 31 March or 1, 2, 3 or 4 April, the accounts are treated (unless you elect otherwise) as being made up to 5 April and there is no need to add in any profits from the next accounting period if those profits are taxed in the following year. There is no overlap profit (see below) and no overlap period.

You may also treat a change of accounting date where the new date is 31 March or 1, 2, 3 or 4 April as though it was a change to 5 April. All overlap profits are deductible in the year that the change takes effect.

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to @inforubina
19th Oct 2017 13:38

That's not the legislation - though it's a fair summary.

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