The following examples show how the basis period rules apply where a change of accounting date occurs in year 4 or later years of trading and the conditions explained at BIM71045 are:
A new business starts on 1 July 2004 and prepares accounts to 5
April each year until 5 April 2011. In 2011-2012 accounts are
prepared for a (short) period of 3 months from 6 April 2011 to 30
June 2011.
The basis periods are:
| 2010-2011 | Year 7 | 12 months to 5 April 2011 |
| 2011-2012 | Year 8 | 12 months to 30 June 2011 |
| 2012-2013 | Year 9 | 12 months to 30 June 2012 |
The change of accounting date occurs in 2011-2012. As the new
accounting date is less than 12 months after the basis period for
the previous year, the basis period for 2011-2012 is 12 months
ending with the new accounting date (30 June 2011), see
BIM71045.
The 9 month period from 1 July 2010 to 5 April 2011 is an
overlap period. The profits for this overlap period will qualify
for overlap relief in a later year, see
BIM71075.
A new business starts on 1 July 2004 and prepares accounts to 30
June each year until 30 June 2010. In 2011-2012 accounts are
prepared for a period of 18 months from 1 July 2010 to 31 December
2011.
The basis periods are:
| 2010-2011 | Year 7 | 12 months to 30 June 2010 |
| 2011-2012 | Year 8 | 18 months to 31 December 2011 |
| 2012-2013 | Year 9 | 12 months to 31 December 2012 |
The change of accounting date occurs in 2011-2012. As the new
accounting date is more than 12 months after the basis period for
the previous year, the basis period for 2011-2012 is the 18 month
period ending with the new accounting date (31 December 2011), see
BIM71045.
As the basis period for 2011-2012 is longer than 12 months
(by 6 months), overlap relief for 6 months worth of overlap profits
from earlier years can be given in 2011-2012, see
BIM71075 –
BIM71090.
A new business starts on 1 July 2004 and prepares accounts to 5
April each year until 5 April 2011. In 2011-2012 accounts are
prepared for a period of 15 months from 6 April 2011 to 30 June
2012.
The basis periods are:
| 2010-2011 | Year 7 | 12 months to 5 April 2011 |
| 2011-2012 | Year 8 | 12 months to 30 June 2011 |
| 2012-2013 | Year 9 | 12 months to 30 June 2012 |
The change of accounting date occurs in 2011-2012. This is the
first year in which accounts are not made up to the old date of 5
April, see
BIM71035.
As 30 June 2011 is less than 12 months after the basis
period for the previous year, the basis period for 2011-2012 is the
12 months ending on the new accounting date (30 June) in that year,
see
BIM71045.
The 9 month period from 1 July 2010 to 5 April 2011 is an
overlap period. The profits for this overlap period will qualify
for overlap relief in a later year, see
BIM71075.
A business prepares accounts to 30 June each year until 30 June
2010. The trader wishes to change his accounting date to 5 April.
If the first accounts to the new date were prepared for the
21 months from 1 July 2010 to 5 April 2012 the 18 month test would
not be satisfied, see Example 5 and
BIM71045. To avoid this, the trader
prepares accounts for 12 months to 30 June 2011 and for 9 months to
5 April 2012.
The basis periods are:
| 2010-2011 | Year 7 | 12 months to 30 June 2010 |
| 2011-2012 | Year 8 | 21 months from 1 July 2010 to 5 April 2012 |
| 2012-2013 | Year 9 | 12 months to 5 April 2013 |
The change of accounting date occurs in 2011-2012. The
accounting date for 2011-2012 is 5 April. Where accounts are drawn
up to 2 or more dates in a tax year, the latest of them is the
accounting date for that year, see
BIM71010.
As the new accounting date for 2011-2012 is more than 12
months after the basis period for the previous year, the basis
period for 2011-2012 is the 21 month period ending with the new
accounting date (5 April 2012), see
BIM71045.
As the basis period for 2011-2012 is longer than 12 months
(by 9 months), overlap relief for 9 months worth of overlap profits
from earlier years can be given in 2011-2012, see
BIM71075 –
BIM71090.
Accounts are made up to 30 June each year until 30 June 2010
when the trader decides to change the accounting date to 5 April.
The next accounts are drawn up for the period of 21 months from 1
July 2010 to 5 April 2012.
The 18 month test is not satisfied, see
BIM71045. There is no change of
accounting date for tax purposes in 2011-2012.
The basis periods are:
| 2010-2011 | Year 7 | 12 months to 30 June 2010 |
| 2011-2012 | Year 8 | 12 months to 30 June 2011 |
Guidance on the consequences for the year after an ineffective
change of accounting date is at
BIM71055.
In this case a change of accounting date in 2012-2013 will
be effective. The accounts to the new date in 2012-2013 will be for
the 12 months to 5 April 2013, which satisfies the 18 months test.
The basis period for 2012-2013 will therefore be:
| 2012-2013 | Year 9 | 21 months from 1 July 2011 to 5 April 2013 |
Accounts are made up to 30 June each year until 30 June 2010. A
single 22 month account is then prepared for the period from 1 July
2010 to 30 April 2012. This account straddles 2011- 2012 and ends
in 2012-2013.
The 18 month test is not satisfied, see
BIM71045. There is no change of
accounting date in either 2011-2012 or 2012-2013 for tax purposes.
The basis periods are:
| 2010-2011 | Year 7 | 12 months to 30 June 2010 |
| 2011-2012 | Year 8 | 12 months to 30 June 2011 |
| 2012-2013 | Year 9 | 12 months to 30 June 2012 |
Guidance on the consequences for the year after an ineffective
change of accounting date is at
BIM71055.
In this case a change of accounting date in 2013-2014 will
be effective. The accounts prepared to the new date in 2013-2014
are for the 12 months to 30 April 2013, which satisfies the 18
months test.
The basis period for 2013-2014 will therefore be:
| 2013-2014 | Year 10 | 12 months to 30 April 2013 |
