Change of date

My client a sub-contract carpenter changed his accounting year end from 30 June to 5 April during the fiscal year 2003-04. Unfortunately an averaging basis was adopted for the revised profits and the overlap relief ignored. On 30 November 2007 my client ceased the business and the transitional relief calculations were shown on the 2006-07 tax return.

Recently I received correspondence from HMRC informing me that the transitional relief calculation had been agreed but that it should have been applied to the profits in the fiscal year 2003-04 when the change of accounting date occurred.

In any case the calculation of the profits in that year was incorrect as there should have been no averaging.

I have agreed the revised taxable profits for the fiscal years 2003-04 and 2006-07 and accepted that technical errors were made.

I have claimed that a remission of...