Kevin Read looks at some hazards to avoid for a sole trader changing accounting date in the tax year 2023/24.
In a previous article, I discussed some of the issues arising from changing accounting date to 5 April before the new ‘tax year’ basis of assessment comes in for 2024/25. Below, I expand on these matters with a practical case study.
Case study: Laura the golfing plumber
Laura is a self-employed plumber and keen golfer. Her annual profits before capital allowances are £59,000, which accrue at a rate of £2,000 per month from April to August (when she plays a lot of golf) and £7,000 per month for the other seven months of the year. She has negligible other income.
She has a December year end, and in the transition year to the new basis of assessment (2023/24), Laura decides to change her accounting date to 31 March (which the new