1169 - Overlap relief used for the year 2015 to 2016

When basis periods overlap (for example in the first 2 years of business or following a change in accounting date) you should keep a record of both the overlap profit and the overlap period. The overlap profit is carried forward each year until you are able to claim overlap relief.

Overlap relief used this year
You may be entitled to overlap relief if you:

• sold or closed down your business, and your basis period this year does not begin on 6 April
• changed your accounting date resulting in a change of basis period, and your basis period this year is more than 12 months long

For help on working out the overlap follow the link Help Sheet 222 - How to calculate your profits.
If you've stopped working for yourself, you're taxable on any profits for the period beginning on the day after your last accounting period and the date your business ceased. You may be entitled to a tax relief called 'overlap relief'.
You must also tell us the date you stopped working for yourself. If you no longer need to pay Class 2 National Insurance contributions, we will arrange for your bills to stop.
Complete the online form here Stopping self-employment
If you've changed your accounting date and still want the change to count for tax purposes, select 'Yes' from the drop down menu, otherwise select 'No'.

Changes of accounting date
There is a change of accounting date if any of the following reasons apply:

• you've drawn up your accounts to a date which is not the same as the date used for tax purposes last year
• you intend to draw up accounts for more than 12 months and no accounting date falls in the 2015 to 2016 tax year
• you changed your accounting date last year, this was not accepted by HM Revenue and Customs (HMRC) and you've drawn up your accounts to the same date this year. (But if you have changed back to your old date this is not treated as a change of accounting date.)

You will usually want your new accounting date to count for tax, otherwise your basis period won't end on the same date as your accounts. If you intend this to be only a temporary change, you may want to ignore it for tax purposes. You can then work out your tax using the same basis period as last year.

Changes of basis period
Special rules which apply if you change your accounting date:

• if your accounting date in 2015 to 2016 is more than 12 months after the end of the basis period for 2014 to 2015, your basis period is the period between the end of the basis period for 2013 to 2014 and the new accounting date. For example, the basis period for 2014 to 2015 ended on 31 May 2014 and the new accounting date is 31 August 2015. Your basis period is the 15-month period 1 June 2014 to 31 August 2015
• if your accounting date in 2015 to 2016 is less than 12 months after the end of the basis period for 2014 to 2015, your basis period is the 12 months ending on the new accounting date. For example, the basis period for 2014 to 2015 ended on 31 December 2014 and the new accounting date is 31 July 2015. Your basis period is the 12-month period 1 August 2014 to 31 July 2015