Self Assessment Overlap Relief: End of Transitional Year

Overlap relief was a mechanism that prevented self-employed people from being taxed twice on the same profits when their accounting year did not align with the tax year. The 2023/24 transitional year eliminated overlap profits and moved everyone to tax year basis.

What Changed

Before April 2024, sole traders could have an accounting year ending on any date. This sometimes meant profits were taxed twice in the opening years of a business, creating "overlap profits" that could be relieved when the business ceased or changed its accounting date.

The 2023/24 transitional year brought everyone onto tax year basis — all sole traders now report profits for the tax year (6 April to 5 April), regardless of their previous accounting date.

Impact on Your Returns

From 2024/25 onwards, your Self Assessment return covers the standard tax year. Any remaining overlap relief was used in the 2023/24 transitional year.

If you believe you had unused overlap relief, check your 2023/24 return. If it was not claimed correctly, you may be able to amend that return.

Accounted handles tax year basis accounting automatically.

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