February 8, 2024
Basis Period Reforms (BPR): Changes To Business Profit Taxation From 2023-24
HMRC have recently announced that they will implement reforms to the basis period (BPR) from 6 April 2023.
Basis Period Reforms (BPR) is a measure that changes the way trading income is allocated to tax years for the self-employed (sole traders) and partnerships, that do not use an accounting period end date between 31 March to 5 April. It aims to create a simpler, fairer, and more transparent set of rules for the taxation of businesses.
It also affects a small number of businesses with accounting periods between 31 March to 5 April, if they have unused overlap relief (generated where profits have been taxed twice due to a basis period straddling 05 April in earlier years) from previous periods.
Who is affected?
The table below summarises who is affected. For more information and HMRC guidance, click here.
Company
- Self-employed and partnerships with a 5 April accounting year-end.
- Self-employed and partnerships with an accounting year-end between 31 March and 4 April.
- Self-employed and partnerships with an accounting period which does not end between 31 March and 5 April.
Not affected by BPR
- Not affected by BPR unless you have unused overlap relief (**) (see note below).
- Accounting year-end will be treated as 5 April for BPR but may be affected by BPR if you have unused overlap relief.
- BPR will affect the way you calculate your taxable profits and prepare your tax returns for the 2023/24 tax year onwards.
How Jerroms will support you
Please rest assured that we are identifying any clients that will be affected by this reform. We will be in touch in the coming months to advise of the actions needed and the likely impact of those actions.
In the meantime, if you have any queries, please do not hesitate to get in touch with your usual Jerroms contact.
SUCCESSION PLANNING AND PASSING ON FAMILY WEALTH
Get In TouchPlanning for the future is one of the most important steps you can take to protect your family’s financial wellbeing and ensure your legacy is passed on in the most effective way possible. Whether you're considering gifting assets during your lifetime or establishing trust structures to safeguard wealth for future generations, succession planning requires careful thought, strategic timing, and a clear understanding of the tax implications involved.
This booklet provides a practical overview of the key considerations when transferring wealth.
We’ve summarised the main areas to consider and highlighted the potential advantages and pitfalls of each approach. While this guide offers a useful starting point, we strongly recommend seeking tailored advice to ensure your succession plan is both tax-efficient and aligned with your family’s needs.
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Jerroms Mortgage & Finance Ltd is registered in England and Wales. Registered number 11459888. Registered Office address as above. Authorised and regulated by the Financial Conduct Authority (reference number: 829252). Mortgages Together, Stratford Corporate Finance and Business Finance Quote are trading names of Jerroms Mortgage & Finance Ltd. VAT No. 326 4715 04.
Jerroms Financial Planning is authorised and regulated by the Financial Conduct Authority and is entered on the Financial Services Register under reference 300784. Registered in England and Wales under reference 4710626. Registered office address: Lumaneri House, Blythe Gate, Blythe Valley Park, Solihull, West Midlands B90 8AH.
Client Directors of the firm are not directors of Jerroms and are not subject to the obligations and responsibilities of directors within Part 10 of the Companies Act 2006.
Jerroms is a trading style of both Jerroms Business Solutions Limited (08923059) and Jerroms GCN Limited (08433008). Registered Office for each of these Companies is: Lumaneri House, Blythe Gate, Blythe Valley Park, Solihull, West Midlands, B90 8AH. A list of directors is open for inspection at the Registered Office.
