The basis period is the period on which a sole trader calculates tax each year.
If you’re self-employed, you can actually choose your basis period:
- either the standard tax year: so your basis period will be from 6th of April to 5th of April next year
- or from 1st of April to 31st of March next year
- or a different start and end date: for example from 1st of January to 31st of December. However this is more complicated to do and you might also end up overtaxed in some years, which you then need to claim back. This is because it doesn’t overlap 100% with the normal tax year. We at TaxScouts don’t recommend you use a different basis period unless you have a solid reason to do it.
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