IAS22437 Personal Tax- 25.3 Incorrect taxed Transitional Profits 2024 and carried forward to 2025 (Fixed 25.4)

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IAS22437 Personal Tax- 25.3 Incorrect taxed Transitional Profits 2024 and carried forward to 2025 (Fixed 25.4)

24th October 2025

This is a DEFECT in IRIS version 25.3.0 where the year 2024 Apportioned Profits taxed values (STEP5) are incorrect/reverted which in turn then affects the carry forward value to 2025:

1. Affects clients who had used the STEP5 override option and also who wish to submit 2024 Amended returns or Late returns
2. Affects clients in 2025 as you may note an increased tax due for Transitional profits on the Tax Comp etc.
3. Select the 2024 year and check if there are transitional profits being calculated – open the relevant period and at bottom click the Magnifying glass. Go to ‘STEP 5 Apportioned Transition profit’ – the entry may have reverted back to the automatically calculated original value (ie 1/5th), you wanted to use more of the Transitional profits to be taxed in 2024 and less carried forward to 2025
4. Tick Override again and enter the new value and click OK. Go straight back in again- has the override been unticked and reverted the values? (ie 1/5th) – if yes, this is the DEFECT. The Tax comp/SA100 will then show the 1/5th transitional profit value being taxed
5. This then affects the transitional profit carry forward value to 2025 (it has not taken in account your usage of more transitional profits in 2024)
6. NOTE: Select the 2025 year and the function ‘Accelerated profits’ is working and you can use more of the transitional profits in 2025

This was investigated by the IRIS Development team and there is a planned fix in version 25.4.0 to be released MID NOVEMBER 2025 (Barring any delays and await final date). We apologise for the inconvenience

Workaround 2024: There is no workaround so please await the release of the 25.4.0 update if you wish to edit the 2024 calculation and want to send a late New/ Amended return with Increased Transitional profits to be taxed (If urgent then submit a paper return, do note the HMRC OCT 2025 deadline).

Workaround 2025: Open the period, open the transitional profits screen, manually edit the ‘brought forward value’ to the correct value (eg reduce it, if the value is too high – see image below).

For a 2024 example see below- You had ticked override and increased the value in STEP 5 to £6873 (so you wanted to pay more transitional tax in 2024 and none is carried forward to 2025), however once you click ‘Ok’ to save and then go back in it, reverts back to the original £1374 (1/5th) which shows on the Tax comp/SA100 and it carries forward the rest to 2025.