Taxpert Basis Period Reform App

Package cost from £99.00 Plus VAT

Despite the delay in the implementation of Making Tax Digital for Income Tax Self Assessment (MTD SA) until April 2026 the change to the basis period rules for ALL sole traders and partnerships went ahead in 2023-24.

 

Finance Act 2022 introduced the most radical change to the taxation of trading profits since the introduction of self assessment 25 years ago. All sole traders and partnerships now move onto a tax year basis from 2024-25. 2023-24 was the transitional year and the rules now introduced have a dramatic impact on the tax calculation for many self-employed taxpayers.

 

The Taxpert MTD Basis Period Reform App is a quick and simple way to show your clients how the new basis period rules will affect their calculations of taxable profit in 2023-24 and beyond.

 

But our MTD Basis Period Reform App does far more than just work out the transitional year (2023-24) profits: it lets you model a change of accounting date in 2023-24 or 2024-25 and the results can be frankly astonishing. You can even check the effect of a cessation in 2023-24 or 2024-25 and the App will show estimated income tax and class 4 NIC liabilities.

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Product Overview

The Taxpert MTD Basis Period Reform App is designed to help accountants and tax advisers with sole trader and partnership clients to work out the effect of the switch to a tax year basis as part of MTD for ITSA.

 

The Taxpert MTD Basis Period Reform App can also be used to model different accounting date strategies to see which clients could benefit from changing their accounting date before the switch.

Whilst these complex calculations can be done manually, they can take up a lot of time and the accuracy of the calculations will need checking. However, with just the click of a few buttons and entering your client’s key data, our App does all this for you. Plus, you can have total confidence that the figures are correct when you present them to your clients.

 

The 2024 version of the App now includes:

  • the tax implications for cessation in 2023-24 or 2024-25;
  • an estimate of the tax and Class 4 NIC liabilities;
  • a schedule of estimated payments on account;
  • an option to use Scottish tax rates;
  • an option to identify state pension age;
  • the ability to include other non-savings income;
  • the ability to include pension contributions and charitable gifts; and
  • an estimate of the tax value of losses arising, where relevant.

 

The solution

 

Here’s how the App works:

 

  • simply input the current accounting date and the profits for each period based on that date;
  • enter the amount of any overlap relief brought forward;
  • the basis period profits are instantly calculated for the tax years 2020-21 to 2027-28;
  • then enter any new accounting date and the revised basis period profits are shown for each tax year.

 

The Taxpert MTD Basis Period Reform App immediately shows if there could be cash flow benefits from changing the accounting date.

Overlap relief is fully accounted for and the user can play around with different dates and profit forecasts to see the cash flow impact on individual tax years.

As with all our other Taxpert Planning Apps, the Taxpert Basis Period Reform App is quick and easy to use. It helps you to give your clients the very best advice and saves you time and money in trying to perform the same calculations yourself.

We strongly advise that you take a look at our Taxpert Basis Period Reform App before you file any 2023-24 tax returns, as it could save your clients a lot of money and in some cases make the difference between their business surviving or not.

 

 

The Taxpert MTD Basis Period Reform App in action

 

  • Abigail is a sole trader with a 5 April year end. Up until 5 April 2022 her profits were about £12,000 each year but post-pandemic she has surged ahead and now makes about £60,000 a year. With no change of accounting date Abigail’s taxable profits will be:

 

               2022-23               £60,000

               2023-24               £60,000

               2024-25 etc        £60,000

 

               But if she changes accounting date to 30 April 2023 her taxable profits will be:

               2022-23               £15,287

               2023-24               £68,930

               2024-25 etc        £68,930

 

               You need to see it to believe it!

 

  • Billy is a sole trader with a 30 April year end. Her profits are consistently £30,000 each year and she has overlap relief brought forward of £45,000. With no change of accounting date Billy’s taxable profits will be:

               2021-22               £30,000

               2022-23               £30,000

               2023-24               £13,000

               2024-25 etc        £30,000

 

               But if she changes accounting date to 5 April 2023 her taxable profits will be:

               2022-23               £13,000

               2023-24 etc        £30,000

 

               You need to see it to believe it!

 

Our Taxpert MTD Basis Period Reform App is a quick and simple way to show your clients the effect of choosing a different accounting date and how this could have a significant impact on how much tax they have to pay.

 

Pricing and Special Offer

The Taxpert MTD Basis Period Reform App costs just £99 + VAT for a single user licence. However, if you have already bought, or you intend to buy, any of the following Apps you will pay £99+VAT for the first App and only £50+VAT for any subsequent Apps you purchase, based on a single user licence. There is no time limit as to when you buy the additional Apps in order to qualify for this special offer. Our other easy to use Apps are:

 

> Download a free trial of Taxpert Basis Period Reform App 2023
> Download a free trial of Taxpert Tax Provider 2024
> Download a free trial of Taxpert Tax Calculator App 2024
> Download a free trial of Taxpert Profit Extraction App 2024
> Download a free trial of Taxpert Incorporation App 2024
> Download a free trial of Absolute Taxpert Pencon Tool 2024

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