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Sole Trader Cessation Accounts

Date range of accounts

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Hello

Just wanted to confirm something as my mind has gone a bit blank (the heat is not helping!)

Sole trader client with a normal year end of 30 June.

Accounts have already been prepared to 30 June 2018 but the 2018-19 tax return has not been submitted yet.

Client now told me he ceased trading 31 March 2019.

Can I just continue with the 30 June 2018 accounts, ie tagging on all the remaining transactions up to 31 March 2019 (in effect producing one set of accounts covering 21 months) and enter it onto one set of Self Employment pages on the 2018-19 tax return?

Or do I have to show two self employment pages on the 2018-19 tax return, one to 30 June 2018 and the other 1 July 18 - 31 March 19?

He has a considerable amount of overlap relief to utilise, I guess the end result would be the same but it was just to check if it can all be lumped together into one period of accounts or is there a reason it would have to be split it on the tax return.

Thank you!

 

Replies (4)

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RLI
By lionofludesch
23rd Jul 2019 17:54

You can do that for a cessation.

But not for a change of accounting date for a continuing business. The maximum length would be 18 months.

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By SXGuy
24th Jul 2019 10:59

So just extend the basis period and enter the whole 21 months.

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By possep
24th Jul 2019 12:15

You need to add another period of account from 1 July 2018 to 31/03/2019 and claim the overlap. He will be taxable on the 21 month period as ceased rather than a year end change but a long period of account causes problems - e.g. Rupert Grint. No point risking HMRC looking at.

Depending on your software you may need to attach one period of account as a PDF and add a note.

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Replying to possep:
RLI
By lionofludesch
24th Jul 2019 12:50

Grint changed his year end. He didn't cease trading.

But - hey - belt and braces - submit a 12+9 if you wish.

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