Top Up Transitional profits

Struggling to get our tax software to calculate

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Has anyone used Top Up Absolute software to correctly calculate the transitional profits please.

We have a 31 August year end and need to enter two sets of accounts, which we have done ie y/e 31/8/23 plus period 1/9/23 to 31/3/24.  However, it is calculating the 19 months profits rather than the 12m plus 1/5th of the second period, despite entering the 1/5th element in the correct box.

There seems to be an adjustment box we need to fill in but cannot see anything obvious.

 

Replies (13)

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By Head-Scratcher
11th Jun 2024 14:17

I had the same problem when using Taxfiler software. The accounts were for a 15 month period to 31/03/24. The 3 months transitional profit was being included twice, once in the 15 month period results and again when completing Box 73.1. I read online that someone using BTC software encountered the same problem, and to resolve it, they entered a minus adjustment in Box 68. So I did the same! If you enter 7 months profit as a minus in Box 68 I think you will get the right answer. I'm not sure this is what is meant to happen though!

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Replying to Head-Scratcher:
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By SJRUK
11th Jun 2024 14:34

Funnily enough I did something similar to get it to work out what the actual tax should be. Thanks for your reply.
It really shouldn't be so difficult !

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Replying to SJRUK:
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By Head-Scratcher
11th Jun 2024 15:05

You are correct that it shouldn't be so difficult!

As three of us have now had problems with three different software products, it points to HMRC being the problem!

I have some 30 April year ends to change to 31 March soon which will mean a 23 month period of account. I was just going to prepare a set of accounts for 23 months and just apportion the profit to obtain the transitional profit. But I was interested to see you prepared a 12 month period followed by a 7 month period? Do you know if there is anything in the transitional rules stopping me from preparing accounts for 23 months?

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Replying to Head-Scratcher:
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By Ardeninian
11th Jun 2024 16:27

Head-Scratcher wrote:

Do you know if there is anything in the transitional rules stopping me from preparing accounts for 23 months?

There's nothing in the rules to stop you from doing this. Up to you whether you do 23 or 12+11. Bear in mind you'll need to follow the rules for two accounting periods if you choose 12+11 (see the earlier thread, link below)

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By rmillaree
11th Jun 2024 16:17

ere has been chapter and verse provided in recent thread - using 2 separate self employment pages that is the way to go from memory without being able to link that thread.

box 68 should do the grunt work of reducing your acounting profit down to appropiate level for transitional period (possibly full amount as negative) then complete boxes 73.1 to 73.3 to bring in tp being taxed

if you follow full workings sheets that will explain the box entries - its just slightly more than a chow doing that

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By Ardeninian
11th Jun 2024 16:26

Earlier thread here: https://www.accountingweb.co.uk/any-answers/change-of-basis-period-enter...

Use the calculator here to check what should be on the return: https://www.gov.uk/guidance/work-out-your-transition-profit

Or use the full manual HS222 Working Sheet 3 to work it out: https://assets.publishing.service.gov.uk/media/6617f3022b2963dfa2d1ea9d/...

If Top Up Absolute/Taxfiler/any other software provider is doing it wrong, tell them.

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Replying to Ardeninian:
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By rmillaree
11th Jun 2024 16:36

i think its simply the wording of box 68 that is throwing everyone into a wobbly - iris excepted - their reliabiulity (iris) is about as good as mr jelly from the mr men. time to go to you tube to go and watch some clasic tv

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Tim Good profile image
By Tim Good
11th Jun 2024 16:47

Basis period reform is causing unacceptable self assessment filing difficulties. HS222 Working Sheet 3 (tinyurl.com/25pvv5pu) tells us to complete a ("Main") SA103 for the later period ended in 2023/24 and a second ("Supplementary") SA103 for any other period ended in 2023-24. In the OPs example the Main SA103 will cover 1/9/23 to 31/3/24 and the Supplementary will cover 1/9/22 to 31/8/23.

Bizarrely (and in my view wrongly) we are told not to complete boxes 66 to 82 on the Supplementary SA103.

The whole filing process is a mess and I am waiting for HMRC to respond to how we should deal with the not uncommon case of a 12 month period to the old accounting date followed by a shorter period to 31 March or 5 April 2024.

Additionally HMRC published (in April 2024) a "System Related Special" and special case 8 applies as follows:

Issue
"Please refer to the workaround where there is an Individual return with more than one accounting period."

Workaround
"Where there is more than one set of accounts for 2023-24, separate Self Employment pages should be completed for each set of accounts. One set of Self Employment pages should be completed with details of the latest accounting period and FSE66 to FSE82 as appropriate, should be completed to arrive at the taxable profit for the basis period. Additional Self Employment pages for any other accounting periods should be submitted as an attachment with an explanation given in white space (additional information). Note: that where the pages do not include the full details of profits, expenses necessary to confirm the net profit the return does not satisfy the requirements of Section 8 TMA1970."

In the meantime I have enhanced my Basis Period Reform App (tinyurl.com/29wv7br3) so that it now includes the Main and Supplementary SA103Fs populated as I think they should be.

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Replying to Tim Good:
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By Ardeninian
11th Jun 2024 17:17

That special case 8 has been around for years, eg 2018-19 is here: https://assets.publishing.service.gov.uk/media/5df8a4bd40f0b609574bca25/...

Software providers are acting as if this is some brand new concept when it's been around for years. It seems HMRC can't give a clear answer that covers all cases as there's so many different permutations of years ends, long/short periods of account, weird basis periods and so on.

It's obvious why boxes 66-82 shouldn't be completed on both sets: only one entry can apply to each tax year. It's out of date now because the page references have changed (it used to be page SE3), but the Revenue manuals have always said not to fill these in - see SAM121480 (https://www.gov.uk/hmrc-internal-manuals/self-assessment-manual/sam121480)

Using HS222 WS3 and the online tool (https://www.gov.uk/guidance/work-out-your-transition-profit) should be enough for anyone to fill in the return properly.

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Replying to Ardeninian:
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By rmillaree
11th Jun 2024 17:27

"It's obvious why boxes 66-82 shouldn't be completed on both sets"

the problem is its not obvious - it would have been obvious if hmrc + bodies in timely had fashion laid out exact boxes hmrc want completing for two different standard scenarious being one acounting peirod and two acounting peirods detailing all boxes to be completed - this would have avoided anyone going astray

the lack of direct fill these boxes in worked examples is scandolous albeit not sure if hmrc now do offer some help if you choose paper return ?

the only good news in this sorry saga Ardeninian is that you are here to plug away and keep people right when they are going wrong for whatever reason - or the software and or hmrc are not really helping.

ok the answers probably are there deep in the working calculation examples but if it was all laid out nice and neatly no need.

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By SXGuy
11th Jun 2024 19:45

I use taxcalc so reading through this thread is not only given me a headache but made me question how I've been completing the tax returns.

From what I believe with tax calc is if you have 1 set of 12 months and another set up to 31/3 then the SE pages just show the figures for the first 12 months and page four of the SE Full pages are used to complete the transition period figures.

Finally a box to bring the taxable profits in line with where they should be.

From taxcalcs notes I'm certain the only time you have two SE pages is when you prepare a period of accounts longer than 12 months, which I haven't seen the benefit of doing as yet.

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Replying to SXGuy:
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By janelm
11th Jun 2024 21:07

For two sets of accounts both ending in the tax year, it is as Tim Good posted above on this thread and as per this set of instructions from TaxCalc, on setting up both periods of account, but then pdf-ing and deleting the first set and attaching them:
https://kb.taxcalc.com/3372

Also discussed on this earlier thread, where the OP confirmed FTax gave the same instructions in the end:
https://www.accountingweb.co.uk/any-answers/calculating-the-transition-p...

If you have one long period of account, then you just need one set of pages and time-apportion the transition profit (TaxCalc's webinar was generally recommending this would be the much easier way, unless compiling two sets of accounts gives rise to a much more favourable transition profit for tax reasons).

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Replying to janelm:
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By SXGuy
12th Jun 2024 07:52

OK thank you for this. Looks like I may have missed a few steps. Same taxable outcome but obviously not how they want it. So will amend the ones I've done.

Thanks again.

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