Hi,
Just wondered if people actually come across this much with there small clients at all, it was one of the hardest parts of my tax exams..
Thanks
Stuart
Hi Stuart, in practice if someone starts a business I always do their first year to the following 5th April to avoid any awkward opening year rules and explain that they will avoid having to pay tax on the same profit twice (overlap profits)
Yeah I am the same. Always get clients to make their year end 05 April or 31 March to keep things nice and simple and avoid overlap relief.
When you mention this could avoid them paying tax on the same profits twice then this idea usually gets a clients agreement.
Have some clients that have none 05 April or 31 March year ends but these are all clients acquired from other accountants with year end already set. So no real point in changing.
Well sometimes there is a good reason to change the year end if you know or can calculate the overlap relief you can claim, especially if they have a really good year and tax is particularly high and you can save some at 40%.
