I act for a number of sole traders whose businesses are extremely small. When I inherited these clients from another practitioner they all had 5 April year ends.
Given the demands of MTD and quarterly reporting and having seen various suggestions (ICAEW and others I think) that it is possible to delay by 12 months these sort of clients’ entry into the quarterly reporting regime by changing their accounting reference date from 5 April to 31 March I thought this may be a sensible approach for these clients.
I am dealing with the first of these clients’ tax return and wanted to seek members’ views on how this should be shown on the Self Employment pages (SEF).
I am aware that HMRC treat 31 March, or any date up to an including 4 April as if it were 5 April (S209 ITTOIA 2005) and thus there will be no overlap profit etc (S220(5) ITTOIA 2005).
When looking at SEF 1 I realise that I need to show 31 March 2017 in Box 9 and put an “X” in Box 11.
Do I use a date of 1 April 2016 in Box 66 on SEF4 or do I use 6 April 2016 given my comments in my third paragraph above?
If I use 1 April 2016 does this mean that I should be using 5/365 days of the profit for the year ended 5 April 2016? If I do, then I end up with this amount as being overlap profit but my understanding was that if you used a 31 March year end then you would not have any overlap profit.
Also, for capital allowances purposes do I need to restrict any AIA or WDA claim to 360/365 days to reflect the fact that my accounting period is not a full year or can I just use a full year’s figures?
Do I need to include any other figures on the SEF pages to reflect the change?
I have read an earlier post on this topic in May 2017 which refers to HS222 but this does not seem to answer the above questions specifically so thought I would try and obtain a definitive answer.
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