08 November 2023
Change of Reporting Date
Basis Period Reform and the Solicitors’ Accounts Regulations 2014
HM Revenue and Customs Basis Period Reform
Revenue and Customs have introduced a new Basis Period Reform measure which
changes the way trading income is allocated to tax years. This measure affects
various business types including self-employed individuals with a profession or
vocation, partners in trading partnerships, other unincorporated entities with
trading income and LLPs.
changes will likely impact businesses that currently do not prepare their
annual accounts with an accounting date between 31 March and 5 April. The new
rules state that all affected businesses will be taxed on profits generated
between the start and end of the tax year (April 6 to April 5), regardless of
their year-end accounting date for preparing accounts.
changes will take effect from the tax year 2024 to 2025. The current tax year
2023 to 2024 marks implementation of the new rules and transition from the
existing ‘current year basis’ of taxation (up to a business’s own accounting
date) to the new ‘tax year basis’ of taxation (up to 5 April).
information regarding the Basis Period Reform measure is available from HM
Revenue and Customs here.
Businesses which may be affected should obtain specialist accounting/taxation advice.
The Solicitors’ Accounts Regulations 2014 and Change of Reporting Date
Implementation of the new
Basis Period Reform measure may give rise to affected businesses considering
whether to change their accounting/reporting date.
are reminded that, should they seek to change the reporting date for their
business, they must also (continue to) satisfy the separate requirements of the
Society’s Solicitors’ Accountants Regulations 2014 (‘the Regulations’).
Members are referred to
Part F – Accountants’ reports of the Regulations in general, and Regulation
(31.4) – Change of reporting date, in particular.
The Regulations are
available on the Society’s website here and
Guidance Note to the Regulations here.
A solicitor who
at any time during an accounting period, operated an office or client account,
must deliver to the Society an Accountant's Report for that accounting period within
4 months of the end of the accounting period.
period means the period for which the accounts of the solicitor are ordinarily
made up, except that it must begin at the end of the previous accounting period
and cover the preceding 12 months.
When a solicitor
either first commences or ceases to practice on their own account the
accounting period may cover less than the preceding 12 months.
If a solicitor seeks
a change of reporting date in relation to the submission of their Accountant's
Report, the reporting period immediately preceding the change may be shorter
than 12 months or the reporting period may be extended to longer than 12 months
(from the end of the previous accounting period) but only up to a maximum 15
extension is conditional upon the Society receiving written notice of the change
of reporting date sought, at least 3 months before the deadline for
delivery of the Accountant's Report that would have been expected based on the
solicitor's original accounting period.
6. The Society
also reserves the right to require the report for any extended reporting period
to be delivered to the Society within a timeframe of less than 6 months from
the conclusion of the solicitor’s original accounting period.
members have any queries regarding the Regulations and change of reporting
date, please do not hesitate to contact the Society’s Professional Conduct
Department via email at Regulation@Lawsoc-ni.org.