From 5 April 2024, all sole trader and partnership businesses whose accounting year doesn’t end on or between 31 March to 5 April will need to report their taxable profits to HMRC on a tax yearly basis.
They may need to find out the details of their overlap relief if they don’t already know this figure. This needs to be done ahead of submitting returns for the 2023 to 2024 transitional year.
On 11 September, HMRC launched an online form that allows individuals to get their overlap relief figure at Get your Overlap Relief figure – GOV.UK (www.gov.uk). HMRC also published guidance about the changes to Changes to reporting income from self employment and partnerships – GOV.UK (www.gov.uk)
Overlap profits are profits that have been taxed twice. These can arise if a business uses an accounting date that does not align with the end of the tax year. Overlap profits create a corresponding amount of overlap relief, given in certain circumstances such as when a business stops trading.