Currently a sole trader or partnership can draw up accounts to any date they want to.  Their tax for any tax year (ending 5 April each year) is then based on the accounts which ended in that tax year.  For most businesses this is simple, they draw up accounts to 5 April or 31 March, the profits are taxed in the same year as they are made.

However some businesses choose a different accounts date, such as 30 April.  A business drawing up accounts to 30 April 2021 is taxed on the profits shown in those accounts in tax year 6 April 2021 to 5 April 2022, because that’s the tax year the accounts end in.

From 2023-24 all businesses will be taxed on the profits actually made in that tax year.  We therefore recommend changing your accounts date to 31 March or 5 April, if it’s not already.  Otherwise every tax calculation will have to be based on a split of two sets of accounts!

As with all of our tax tips and web pages this information is necessarily summarised and of a general nature.  If you would like detailed specific advice please contact us.