This note discusses the issues around changing accounting date.

Once a business has established an accounting period end it is fairly uncommon to change it. Many businesses will have adopted an accounting date on starting their business and never reconsidered it. A change can be disruptive to administration of the business and there is often very little reason to do it. However, in some situations it can be beneficial and smaller businesses tend to have less attachment to a year end, due to simpler administration.

Following the abolition of basis periods from 2024/25 for sole traders and partners in partnerships, meaning that profits and losses are assessed on a tax year basis from 2024/25 onwards, the change in accounting date rules in this guidance note are only applicable in the tax years up to 2022/23. There is a specific calculation of the basis period for the transitional year of 2023/24 which is set out in the Basis period transitional rules 2023/24 guidance note.

From 2024/25 when unincorporated businesses will be taxed on a tax year basis, where