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Introduction

This guidance note relates to the checklist and client factsheet on transition profits and the income tax computation, see Checklist ― impact of transition profits from basis period reform on other aspects of personal tax and Client factsheet ― how basis period reform for the self-employed may affect tax on other income from April 2023. It can also be used as an index and summary to identify areas of the tax computation affected by transition profits.

Transition profits run from normal accounting date ending in 2023/24 up to 5 April 2024. Transition profits impact adjusted net income and total taxable income within the income tax computation and items based on these figures. The focus here is on how the inclusion of transition profits within the tax computation may impact tax due on non-trading income, such as savings income, and other aspects of the tax computation such as relief for pension contribution and student loan repayments. It also highlights items which are unaffected, such as the high income child