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Farouk Bizima

Business Tax - Basis Period Reform

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Hi All,

The Business Period Reform changes for unincorporated bussinesses coming through from 2024/25 tax year appear complicated for Sole Traders and Partnerships whose year end is not 31st March, or 1st to 5th April.

For example a Sole Trader business with year end of 31st Jan will be taxed as below:

- 301/365 of profit for year to 31st Jan 25 (6th April 24 - 31st Jan 25)

- 64/365 of profit for year to 31st Jan 26 (1st Feb to 5th April 25)

So the accountant would be forced to estimate profit for year end 31st Jan 26 to be able to file SA tax return by 31st Jan 26 deadline (for 24/25 tax year). In which case the tax return would need amending once the actual accounts are finalised.

So my question is, would it not be simpler to change the year end date for such a business so that it's accounting year end matches with tax year end?

Thanks.

Farouk

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