We did 4 months ago just by changing the agent details on the portal, we also wrote to HMRC as well. The odd thing still comes through via mail redirect and we pop into the old office to collect any other mail and then inform accordingly.
Yes my bad, I was meaning 2nd year it is the year ending in the basis period so 30th April 2022 in my scenario. Not sure where I dragged PYB from ! I knew what I meant
The issue is that she is a partner in a large national insolvency firm so no way will they be changing the year end unless it is board level policy.
And as a junior level partner I won't be recommending her retiring and hoping she gets re-appointed the next day.
The answer I think is you have to follow the rules, it is what it is
To shed more light this is a large national partnership and I am guessing partners come and go all the time. I have no involvement in the partnership accounts. The partners are free to engage an accountant to assist in their self assessment obligations as they choose. So I do a return for 2, one who has been a partner for say 6 years and will follow the transitional basis. The other client is the newer partner where my conundrum arises
A partner is, in effect, a sole trader and whilst the underlying data is driven from the partnership accounts and tax profit share they don't necessarily have the same basis period for a tax year.
Indeed my understanding of the transitional rules is that a partner can independently choose to take the spreading option for the transitional period profit or simply get the full hit out the way. Eg they could offset by a large pension contribution, or make EIS investments etc.
To re-iterate my conundrum, though I have seen no guidance to suggest you can do anything other than follow the rules, it seems a bit complicated to go
Actual
Preceding year basis
Transitional year
Actual
Actual
But I presume there is no way of simply just going actual in Year 2 (2022/23) and Year 3 (2023/24)
I got free tickets to see The Wonder Stuff at Shepherds Bush empire a couple of Saturdays ago. Ok that was more the client could not make it last minute and realised there was a Modern Idiot - aka me - who would take up the offer
As this came back up on my email digest, they say a week is a long time in politics. Fair to say DKB as a fellow SWFC fan i think a day is a long time !
Just a global thanks to everyone who took the time to give their views and advice. It was much appreciated and I think what this forum is good for. Sound out ideas particularly on these type of topics where I am out of my comfort zone somewhat.
On balance I will stick with the tried and trusted route of Option 1. If nothing else there has been a lot of outside issues on me and my staff over the last few years on top of the impact of Covid so taking the low road - well given we have no idea what Govt and HMRC may still throw at us - seems the pragmatic way
To add the one bit of software we routinely use that is not Sage is Iris Earnie for Payroll. I try and keep out of that work leave it to others, but when I do I find it awful to use and the risk I would find alternative software - Cloud or not - similarly frustrating
Thanks for your very full and considered replies. As you say the world is moving toward Option 3 at a fast rate, but i have a very mixed practice in terms of clients, the age of clients /their use of tech and indeed the staff (and me) probably not fancying it either. Sage does work for us - I suspect there are cheaper options out there - but I take a lot of emphasis on I know it and its never failed on us in trying to do something for a client.
Because i have always had Option 1 I have not really given much attention to how Option 2 works practically, so its unfamiliarity and indeed knowing where to start, particularly as my current IT guy I suspect has a vested interest in keeping 1.
I concur that Option 3 whilst feasible is not necessarily my preference on this cycle of change. I am sure in next to no time, certainly 5 years henceforth it will be the de facto choice and indeed in my business life cycle where it works
Option 1 is something I am familiar with of course and there would be continuity / familiarity.
Option 2 my problem is I am not that tech minded, I readily use it but in a plug and play sort of way. So out of my comfort zone somewhat although I have my weekend reading list on the subject. But i have that suspicion my IT guy is leading me toward Option 1 without offering any consideration of Option 2.
Cheers that is useful. Part of me has suspected that and the fees he would get - he is not in house per se - so I am not convinced I am getting truly independent advice.
My answers
We did 4 months ago just by changing the agent details on the portal, we also wrote to HMRC as well. The odd thing still comes through via mail redirect and we pop into the old office to collect any other mail and then inform accordingly.
Yes my bad, I was meaning 2nd year it is the year ending in the basis period so 30th April 2022 in my scenario. Not sure where I dragged PYB from ! I knew what I meant
The issue is that she is a partner in a large national insolvency firm so no way will they be changing the year end unless it is board level policy.
And as a junior level partner I won't be recommending her retiring and hoping she gets re-appointed the next day.
The answer I think is you have to follow the rules, it is what it is
Thanks for the considerations.
To shed more light this is a large national partnership and I am guessing partners come and go all the time. I have no involvement in the partnership accounts. The partners are free to engage an accountant to assist in their self assessment obligations as they choose. So I do a return for 2, one who has been a partner for say 6 years and will follow the transitional basis. The other client is the newer partner where my conundrum arises
A partner is, in effect, a sole trader and whilst the underlying data is driven from the partnership accounts and tax profit share they don't necessarily have the same basis period for a tax year.
Indeed my understanding of the transitional rules is that a partner can independently choose to take the spreading option for the transitional period profit or simply get the full hit out the way. Eg they could offset by a large pension contribution, or make EIS investments etc.
To re-iterate my conundrum, though I have seen no guidance to suggest you can do anything other than follow the rules, it seems a bit complicated to go
Actual
Preceding year basis
Transitional year
Actual
Actual
But I presume there is no way of simply just going actual in Year 2 (2022/23) and Year 3 (2023/24)
I got free tickets to see The Wonder Stuff at Shepherds Bush empire a couple of Saturdays ago. Ok that was more the client could not make it last minute and realised there was a Modern Idiot - aka me - who would take up the offer
As this came back up on my email digest, they say a week is a long time in politics. Fair to say DKB as a fellow SWFC fan i think a day is a long time !
Just a global thanks to everyone who took the time to give their views and advice. It was much appreciated and I think what this forum is good for. Sound out ideas particularly on these type of topics where I am out of my comfort zone somewhat.
On balance I will stick with the tried and trusted route of Option 1. If nothing else there has been a lot of outside issues on me and my staff over the last few years on top of the impact of Covid so taking the low road - well given we have no idea what Govt and HMRC may still throw at us - seems the pragmatic way
To add the one bit of software we routinely use that is not Sage is Iris Earnie for Payroll. I try and keep out of that work leave it to others, but when I do I find it awful to use and the risk I would find alternative software - Cloud or not - similarly frustrating
Thanks for your very full and considered replies. As you say the world is moving toward Option 3 at a fast rate, but i have a very mixed practice in terms of clients, the age of clients /their use of tech and indeed the staff (and me) probably not fancying it either. Sage does work for us - I suspect there are cheaper options out there - but I take a lot of emphasis on I know it and its never failed on us in trying to do something for a client.
Because i have always had Option 1 I have not really given much attention to how Option 2 works practically, so its unfamiliarity and indeed knowing where to start, particularly as my current IT guy I suspect has a vested interest in keeping 1.
Yes that is the options I had narrowed it down to
I concur that Option 3 whilst feasible is not necessarily my preference on this cycle of change. I am sure in next to no time, certainly 5 years henceforth it will be the de facto choice and indeed in my business life cycle where it works
Option 1 is something I am familiar with of course and there would be continuity / familiarity.
Option 2 my problem is I am not that tech minded, I readily use it but in a plug and play sort of way. So out of my comfort zone somewhat although I have my weekend reading list on the subject. But i have that suspicion my IT guy is leading me toward Option 1 without offering any consideration of Option 2.
Cheers that is useful. Part of me has suspected that and the fees he would get - he is not in house per se - so I am not convinced I am getting truly independent advice.