Sole traders and partnerships - do you need to amend your 2023/24 tax return?

Who is affected by basis period reform (BPR)?

Self-employed sole traders and partners in partnerships (known as unincorporated businesses) who did not have an accounting period ending on 31 March, 1 April, 2 April, 3 April, 4 April or 5 April had to make changes to the way they report profits on their tax returns from the 2023/24 tax year onwards.

The 2023/24 tax year was a transitional tax year to ensure that all businesses affected by BPR were ready to report their profits on a tax year basis from 6 April 2024 (2024/25) onwards. This is because from 6 April 2024 (2024/25) onwards, unincorporated businesses must report their profits on a tax year basis. This means reporting profits for the period from 6 April in one year to 5 April in the following year. We explain how to do this in our detailed guidance on BPR including details of a relaxation of the rules if you have an accounting period ending between 31 March and 4 April inclusive.

As BPR is such a big change and the transitional rules were complicated, it’s important to check that you haven’t missed anything on your 2023/24 tax return, such as:

• Claiming unused overlap relief
• Finalising provisional or estimated accounting figures
• Amending your automatic spreading position

If you have, then you can still amend the 2023/24 tax return for any of the above.

We explain each of these areas in more detail below.

Claiming unused overlap relief

Overlap relief may be available to reduce your taxable profits within the 2023/24 tax year. Overlap relief can be claimed if you have overlap profits. We explain overlap profits and how they may have arisen in our BPR guidance.

All overlap relief must be claimed on the 2023/24 tax return, or it will be lost. You will not be able to use it after the 2023/24 tax year even if you cease trading.

  If you have not claimed all your available overlap relief then you need to amend your 2023/24 tax return by the amendment deadline which in most cases will be 31 January 2026. There is information on how to amend your tax return on our website. 

If you do not know how much overlap relief you have, HMRC may be able to provide you with this information based on your previous tax returns. We explain more about overlap relief and how to ask HMRC for help in our BPR guidance. We understand that it will be possible to ask HMRC for help finding your overlap relief information until 31 January 2026, but it is recommended you request this information in plenty of time before the amendment deadline. 

Finalising provisional or estimated accounting figures

Under BPR you can still have an accounting period which is different to the tax year, but you will need to report your accounting information using the tax year. This means using figures from two different accounting periods on your tax return. We explain this in more detail and illustrate with an example in our main BPR guidance. 

If you have a different accounting period to the tax year, you may have submitted your 2023/24 tax return using provisional or estimated figures. HMRC understands that this may happen in order to submit your tax return before the filing deadline as shown in our Kieran example. If so, you will need to amend your 2023/24 tax return to update the estimated figures with your actual final accounting figures. The deadline to amend a 2023/24 tax return is usually 31 January 2026.

Finalising your accounting figures could result in:

• No change to your tax position if your taxable income remains below the personal allowance
• Additional profits above your personal allowance, so extra income tax and Class 4 National Insurance contributions (and late payment interest) are due
• Reduction in profits resulting in a tax refund.

There is more information on using provisional or estimated figures on your tax return and how to amend your tax return on our website.

Amending your automatic spreading position

Under BPR you may have had additional profits in the 2023/24 tax year. If you had additional ‘transition part’ profits then these profits are automatically spread evenly over five tax years (2023/24-2027/28). This means you pay tax on 1/5 (one-fifth) of the ‘transition part’ profits in each of the five years. This is in addition to any tax due on ‘standard’ profits made in each of the five tax years.

However, it is possible to accelerate this spreading by making an election and we explain more about this in our website guidance Spreading additional profits in the transition period.

  If you want to accelerate spreading in the 2023/24 tax year, then an election must be made on or before 31 January 2026. You may want to make the election by amending your 2023/24 tax return, there is information on how to amend your tax return on our website.