In case you are getting the wrong end of the stick, I am not getting excited, counting down the sleeps till Xmas. December is an interesting month. We have just about the same amount of work to do, if not more, in a short month, because of the holidays. Various deadlines still need to be met, and January is just around the corner, with all that it brings.
I suppose we should be used to it. But this year, just to complicate matters, I have had an additional deadline with complex forecasts that were needed at short notice for a significant grant application.
This all meant that my week started a bit differently. I spent Sunday and into the early hours of Monday putting together the forecasts. Got to bed about 3 am and then was up again for a meeting to progress the application at 9 am. But my work on these is now finished and they will have been submitted and probably well before you read this.
It’s probably as well that Helen and I are both involved in the business, and both put in the hours. I don’t think someone who has not experienced this way of working would truly understand. So, not needing a divorce lawyer just at the moment! Well, I don’t think so. Ask Helen!
But, at the end of the day, there will come a moment when it is obvious that we are not going to get all that we wanted to get done and just say, “Stuff it” and leave the rest until after the holidays. I think that will probably be sometime on the 23rd of December. I think it is human nature to believe we can get more done than is realistically possible, but that probably drives us to get more done than we might otherwise manage to do.
So, at that moment, Xmas can begin for us.
What do you expect to achieve in 2024? It’s a new year just like any other year, and it is like a blank sheet of paper for you to write in. Mind you we have a pretty good idea what our 2024 will look like.
We will start with January and filing 2023 tax returns and any revisions to 2022 tax returns. In February we spend our time clearing up all the debris left behind in January. Many years ago, that meant picking up all the tax files that accumulated around our desks. Thankfully, in a paperless office, that is not a chore anymore.
In April we have the change in the basis periods for every self-employed trader. From April, your profits to be included on your 2024/25 tax return will be those for the 12 months to April 2025. So, if you don’t have a 31 March or 5 April year-end, your profits will have to be apportioned from the 2 accounting periods covering the fiscal year.
On top of that, we will have the additional taxes to be paid in respect of 2023/24. That year, which is more than half done, is the transitional year from the old basis of assessment to the new, with anything up to 23 months profits taxable in one year. There are transitional reliefs but there is still going to be additional tax due. These can be spread over the next 5 years but it is still going to be a burden on hard-pressed businesses coming out of Covid. But it does not look like the government is for deferring the change so there we have it.
If you trade through a company, you are spared all that upheaval. It will not affect you. We used to be a partnership, hence the name but we incorporated in 2004 to take advantage of all the tax benefits that incorporation brought at that time. There are not so many benefits now, but we are not for changing back.
I suspect we will spend a lot of 2024 speaking to you and others about all the changes, helping you all steer a path through all the chaos. And in amongst it all we need to keep one eye on MTD and quarterly reporting that will be coming in a couple of years. Mind you, it has been deferred a couple of times and modified, so will it actually happen? Your guess is as good as mine.
Self-employed traders are also going to have the option from next year to prepare accounts on a cash basis irrespective of their turnover. This sounds to me like a recipe for some interesting tax planning, but we will need to wait and see what overly complex rules HMRC introduce to prevent a loss in tax revenues.
All in all 2024 is going to be an interesting year. I am looking forward to it, but I am also looking forward to Xmas and having a houseful of family. Mind you, after a few days, I may need to go and hide in my home office at the other end of the house. Bah humbug!
Alan E Long
The Long Partnership
07770 738770
