IAS Personal Tax – Work out the Basis Period Reform transition profit in 2023/24 onwards+ report changes

ias-personal-tax-work-out-the-basis-period-reform-transition-profit-in-2023-24

IAS Personal Tax – Work out the Basis Period Reform transition profit in 2023/24 onwards+ report changes

28th January 2026

IAS Personal Tax has been updated to match the HMRC Basis Period Reform (BPR) transition profit calculations.

If you wish to check the IRIS Personal tax calculation then here is the link to the HMRC own BPR calculator – follow the relevant rules and steps set up by HMRC. https://www.gov.uk/guidance/work-out-your-transition-profit

Changes to reporting income from self employment and partnerships- How to report profit on your Self Assessment tax return from 2023 to 2024 if your accounting year does not end on or between 31 March to 5 April.: https://www.gov.uk/guidance/changes-to-reporting-income-from-self-employment-and-partnerships

BT Calculation by dates compared to PT calculation by dates

Partnership and Sole Trades in Business Tax follow the accounting period rules and NOT the basis period rules. The full accounting period from the beginning to the end. When refreshing to Personal Tax we adjust for the basis period on the self-assessment return automatically.

Therefore, the computation in Business Tax will always reflect the full accounting period as set up within Accounts Production regardless of whether there is a year-end in the tax year.

When the figures are refreshed to Personal Tax, the full accounting period is also shown in the data entry section. However, when you run the Trade Computation you will see that the system has created the basis period as on the self-assessment return, the income is assessed on the basis period rules and will never be more than 12 months’ worth of profit.

Therefore, Business Tax is using the account period rules and Personal Tax uses the basis period rules to adjust the assessable profit and this is according to HMRC guidelines.

You expect the FULL trade profits but only shows a partial amount? 

HMRC basis period rules are being applied as per the Trade computation. HMRC does not automatically change your accounting year-end to 5 April. Your accounts still legally run to your period dates, because that is the business’s chosen year end.

What HMRC does instead is tax only the part of those accounts that falls into the tax year. For example in the 2024/25 tax year, only certain (XXX days) falls within it, so that only XXX days out of the year of the total profit is brought into the calculation. That is why the computation still shows “year ended June 2024” rather than 5 April 2024 — the year end has not been changed, only apportioned for tax purposes in line with the basis period rules.

An example in the 2025 tax year where trade profits are showing lower then expected:

1. Run the latest year (2025) Trade computation and note the dates/values.
2. Change to the prior year (2024), run the Trade computation, it may utilise a portion of the 2025 profits (see step 1) as transitional profits. This means the total profits are being taxed correctly in 2024 AND ALSO in 2025 (and are not ignored/missing).
3. Then create the next period in 2025 and add in profits, that will also be apportioned to show in the 2025 Trade comp/Tax comp as well.
4. This will continue due to the period dates used.
5. The automated apportionment of profits cannot be overridden as it follows HMRC BPR rules.
6. If you believe the Tax Calculation in Personal Tax is incorrect due to the periods used on the Trade Computation, then please provide the HMRC legislation and this can investigated further. The HMRC own calculator is available if you want to check.