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Transitional overlap relief

Change of accounting date from 30 June to 31 March

A client prepares his accounts every year to 30 June. He has had a good year to 30 June 2017 (which would normally form the basis of assessment for 2017/2018). However, for a number of reasons, the following 9 months to 31 March 2018 were nowhere near as good, with the result that the taxable profit for that period is actually less than the transitional relief brought forward. He is therefore quite keen to change the accounting date.
My question is : do I utilise the whole of the transitional relief brought forward or omit 5 days' worth, as the new accounting date is 31 March not 05 April? I am aware that HMRC regard the two dates as interchangeable providing one adheres to the date selected and does not alter it without good reason.

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01st Jan 2019 05:10

I have decided not to get drawn into threads in 2019 while the OP remains anonymous (or equivalent). Thank you for posting in 2018 so I could share that update :)

While I'm here...

Tax is governed primarily by legislation. Not the whim of HMRC. Not even (as many Awebbers seem to think) by the judgment, experience and collective decision-making ability/democratic vote of accountants.

Quote:

I am aware that HMRC regard the two dates as interchangeable.

Why? Because legislation says so.

Guess what? Legislation answers your question too. It's ITTOIA (of course) and s220(5) - which (gosh I must be in a good mood!) I would interpret ("may treat") as meaning it's your choice.

Signing off to Anonymous with a complete, indisputable, correct answer. Happy New Year!

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to Tax Dragon
01st Jan 2019 11:05

Jeez, Dragon - you're up early.

Or have you just come in late ?

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01st Jan 2019 08:54

Well said - I'll second that.

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01st Jan 2019 10:25

I'm getting a bit fed up of this Anonymous business myself.

There's no reason for anonymity here.

And - yes - it's not some sort of concession. It's enshrined in the legislation.

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By Matrix
01st Jan 2019 11:42

I would start reading a few sections before that to see if the accounting period can actually exceed 18 months.

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to Matrix
01st Jan 2019 11:57

You're right - though there's nothing to suggest that the OP intends to prepare a 21 month set of accounts.

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to Matrix
11th Jan 2019 12:13
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to sammerchant
11th Jan 2019 12:24

If you read as far as example 4, you'll see that it can't. Eighteen months is your limit.

Unless the trade ceases. Then all bets are off.

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11th Jan 2019 12:16

I'm sorry to have upset Tax Dragon and others. There is a very valid reason why the post was anonymous, else I have little hesitation in being known, when I am able to respond to condescension and sneers. Besides, when people use pseudonyms, are they not hiding their identities?

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to sammerchant
12th Jan 2019 00:57

Apology accepted. Thank you.

What Lion is pointing you towards is a 9 month account. Two sets of accounts (12+9) works; one set (21) doesn't. I'd assumed from your OP that you knew that. Maybe it's just as well you came back to check.

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to Tax Dragon
12th Jan 2019 09:22

There's a difference between "accounting period" and "basis period". Usually the same thing but, sometimes, they aren't.

As Rupert Grint discovered.

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to lionofludesch
12th Jan 2019 13:09

Quite right. My bad. I should have been explicit. There were two sets of accounts (12 + 9 months) and the Return has been submitted and accepted.

Thanks to all who responded.

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