Basis Period Reform and Self Assessment: What Changed

From the 2024/25 tax year onwards, all sole traders report profits on a tax year basis — profits from 6 April to 5 April. This change, known as basis period reform, simplified how self-employment profits are taxed.

What Changed

Previously, sole traders could choose any accounting year-end date. This created complexity around which profits were taxed in which tax year, and often resulted in overlap profits being taxed twice.

Now, every sole trader reports profits for the standard tax year period, regardless of their accounting date.

The 2023/24 Transitional Year

The 2023/24 tax year was the transitional year. Sole traders with non-standard accounting dates had to report extra profits to "catch up" to the tax year basis. These transitional profits could be spread over five years.

Impact from 2024/25 Onwards

From 2024/25, your Self Assessment return simply covers 6 April to 5 April. No more complex basis period rules, no more overlap relief. This aligns perfectly with MTD quarterly reporting from April 2026.

Accounted is set up for tax year basis accounting from the start.

Stop dreading your Self Assessment. Accounted tracks everything throughout the year so January is just a click, not a crisis. Try it free.