From 2024/25 tax year onwards a sole trader is taxed on the profits arising in the tax year1. For details of the rules on basis periods which applied up to the tax year 2022/23 see B8.102–B8.107. For the transitional rules applying in the tax year 2023/24 which bridges the period between the end of the basis period for 2022/23 and the start of the tax year basis in 2024/25, see B8.101B.
Where an accounting period does not coincide with a tax year the trader will need to apportion the profits or losses of the accounting period to the relevant tax years2. The apportionment should be done by days but HMRC will accept alternatives if the basis of time apportionment is reasonable and applied consistently3.
There may be circumstances in which a more accurate
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Web page updated on 17 Mar 2025 17:18