Basis period

The basis period is the period on which a sole trader calculates their tax each year.

If you’re self-employed, you can choose your basis period.

Here are the different periods to choose from:

• The standard tax year from 6th April – 5th April the following year
• From 1st April – 31st March the following year
• A custom start and end date like 1st January – 31st December

Using a custom period can be complicated. One of the common risks is ending up overtaxed and having to claim it back. This happens because not every basis period will overlap 100% with the normal tax year. It’s therefore best to only use a custom basis period if you have a solid reason to do so.