»Ê¹ÚÌåÓýapp

If the basis period does not have a transition part, the profits for the 2023-24 basis period will be the profits of the standard part after any overlap profit has been deducted. In these circumstances the only overlap profits available for deduction would be where a deduction has not been claimed on a change of accounting date in an earlier tax year.

Example 10 â€� computation of profits â€� no transition partÌý

A trader makes accounts up to 5 April each year. »Ê¹ÚÌåÓýapp profit for the accounts ending 5 April 2024 is £20,000.Ìý

»Ê¹ÚÌåÓýapp basis period for 2023-24 is only made up of the standard part which is the period from 6 April 2023 to 5 April 2024. »Ê¹ÚÌåÓýapp profits for the basis period are the profits of the standard part, £20,000.

Example 11 � computation of profits � no transition part with late accounting date

A trader makes accounts up to 31 March annually. »Ê¹ÚÌåÓýapp profit for the accounts ending 31 March 2024 is £35,000. »Ê¹ÚÌåÓýapp trader historically made accounts to 31 December, but in the year their accounting date changed they did not deduct £8,000 of overlap profit which was due.

»Ê¹ÚÌåÓýapp trader will be taxed on the profits of the standard part, the period from 1 April 2023 to 31 March 2024, as the late accounting date rules automatically apply.

»Ê¹ÚÌåÓýapp profits for the basis period will be computed by deducting the overlap profit from the profits of the standard part:
£35,000 - £8,000 = £27,000.

(If the trader elects to disapply the late accounting date rules, there will be a transition part from 1 April to 5 April 2024 and the rules in BIM81290 must be followed to calculate the taxable profits of the basis period.)