UK tax year dates

Accounting, Tax Year Dates for Sole Traders

08/12/2022tax , Tax Issues , Tax News and Tips , Tax Saving Tips

Whether you are new to the business world or have just signed up for being a sole trader to mark your brand in the industry, you are in need of knowing your UK tax year dates and when your accounting period will start in this first journey. Well, your first accounting period is considered the moment your business has commenced. As a beginner, several people keep enquiring whether they have a choice of the accounting period or what are other tax implications to meet before the deadline approaches.

This blog will work as a comprehensive guide to help you in gathering information about your basis period, what to do if you are taxed twice in the same self-assessment, whether you have the ability to change your accounting dates, and how will you deal with the opening year period and the business losses.

 

Talk to one of our intelligent and clever professionals to get your further queries about UK tax year dates and how to meet them. We will ensure to come up with the best possible solution.

 

What is a Basis Period?

The basis period refers to a period of time in which the sole traders are required to fulfill the tax payment liabilities in every tax year. This is just similar to your accounting year. If you are in a partnership, each individual that is involved in the partnership will have to adhere to their own basis period. This is because of the fact that the implication of the basis period is for each individual and it can not be used to apply to a partnership as a whole. According to your profession or the type of trading customers you are following, the rules will be specific for the accounting period. Generally, the rules are as outlined in the following:

  1. The profit within a duration of 12 months will have to be taxed.
  2. In one tax year, the profit duration of 12 months will be covered only, not more than this.
  3. In the case of overlap profits, there are chances that the profit is taxed for a duration of more than 12 months.

 

Are You Taxed Twice Under the Same Self-Assessment?

As a sole trader or partnership, you must know that it is preferred to choose the deadline that comes at the end of the month. This is because such dates are more convenient to follow because you mostly have your payments in hand. Now comes the question that how the accounting period is related to the overlap profits as mentioned earlier. Overlap profits referred to the kind of experience when you are taxed two times in the same self-assessment period. This happens when you tend to change the date of your accounting period. Also usually at the beginning of the accounting years well.

If you are the one who is experiencing overlapped profits, this is imperative to understand that you will have to inform HMRC immediately about this while doing our tax returns. This will allow you to make a deduction of these overlap profits at the opening of the accounting year or in the case you cease your business.

 

Can I Change my UK Tax Year Dates or Other Accounting Dates?

Many people consider changing the date of their accounting period because they do not find it convenient to follow according to their needs. Especially when the rates of income tax change, people are inclined more towards changing the dates because of the relevant advantages. You are allowed to decelerate or accelerate the time when your profits are taxed. We have outlined the accounting period changing details in the following and they are available with the guidance of HMRC as well.

  1. You are liable to get in touch with HMRC to inform them by the end of 31st January if you require any change of date in your accounting period.
  2. Your accounts period should not exceed the limit of 18 months.
  3. You must check the records of your serious five years and you should not have experience in changing the accounting period.
  4. You must provide a genuine and commercial reason that is requiring the change of accounting period.

 

How Will You Deal with the Opening Year Business Loss?

If you are dreaming about loss relief, be aware that if HMRC considers your business as a hobby or side gig, you will not be allowed to avail of the relief. Most of the people who are associated with cash accounting tend to carry forward their losses in such a case. 31 March and 5th April are two options on which the accounting year ends, so you can apply for the relief before these deadlines approve because otherwise, you will have to carry forward them to the next year. You need to know that you will be able to get the relief once and there is no chance of getting it again.

 

The Bottom Line

Now that you have gathered a fair amount of information about UK tax year dates, we can bring the discussion towards wrapping up. If you are a sole trader or in a partnership, you might require a change in your accounting period date at some point. However, you will have to be considerate of the rules and regulations to follow the protocol in this regard. We hope these few minutes of reading will help you to develop a better understanding of UK tax year dates as a beginner. As well as how to deal with them professionally in the future.

 

If you seek professional help, learn more about UK tax year dates and how to meet them. Why wander somewhere else when you have our young and clever team of professionals at CruseBurke

 

Disclaimer: The information provided in this blog is about UK tax year dates, including the text and graphics, in general. It does not intend to disregard any of the professional advice.


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