Can I claim income for work done but not paid for in the same tax year?

Am I able to bring forward a payment received in my 23/24 tax year in order to make full use of my 22/23 Personal Tax Allowance? I am self-employed doing my own accounts online using the Cash Basis method of accounting. Working regularly throughout the 22/23 & 23/24 tax years I have received almost my entire income in the latter year. Using cash basis this would leave almost no tax liability in 22/23 and a sizable liability in 23/24, sizable for me, that is. I hope spreading my income, which was legitimately earned equally over the two years could reduce my tax liability by two thirds. I understand claiming income not received in a specific tax year can’t be done using Cash Basis accounting therefor I should consider switching to traditional accounting taking account of any cash basis-to-accrual accounting transitional rules, which I believe can only be done using a paper tax return? With cash basis my 22/23 income is sufficiently low to not need submitting a tax return, should I submit the form anyhow or is there anything else at this late stage that I can do to better make use of my personal tax allowance for the 22/23 tax year? Another consideration is to continue using cash basis and include my 22/23 trading loss in my 23/24 accounts, but this is by far a lessor option in terms of tax liability. Cash basis is normally very convenient for my purposes, I can’t imagine this situation will ever arise again and wonder if I should stick to cash basis as, age wise, I doubt I have many trading years left. I have called the HMRC enquiry line this morning and after holding on for an hour the advisor I spoke with suggested options were possible, one of which was to send out relevant tax return forms, I was put on hold while he checked… unfortunately the phone line went dead. Any suggestions would be very helpful.

Hi,

If you move from cash basis to traditional accounting you may need to work out an overall adjustment.

HS222 How to calculate your taxable profits (2023)

Thank you.

Thank you, I understand there will be an overall adjustment to be made and have the form (HS222). I’ve asked HMRC to send a paper tax return and have downloaded the other relevant forms I will need for my return. I realise I will almost certainly miss the tax return deadline but currently consider the £100 fine imposed will be relatively insignificant to the income tax I might save using traditional accounting. However, I worry that rather than the 31st January, the deadline for filing paper returns was 31st October which I understand incurs a daily £10 charge if more than three months late, in other words from the 31st January 2024. In summary. Is changing to traditional accounting for the 22/23 tax return the only way I can make use of this year’s personal tax allowance on income earned but not paid, or is there provision using cash basis in the 23/24 tax return to claim income was earned and will need taxing from the previous year? Lastly, should I contact HMRC confirming I am filing a tax return albeit up to a week late, and might that defer or reduce any fines, I suspect not as my situation is of my own creating? If my position remains unfocused come 31st January I will submit a Cash Basis tax return, by that time I suspect any alternative action, which would probably include professional advice, may well end up costing more in time, effort and money, than I hope to save on tax liability.

Hi,
As the deadline for paper returns was 31/10/23, you will automatcially be charged for late filing if you opt for this.
You can appeal in writing giving your reasons for any penalties but there is no guarantee that the appeal would be accepted. you can change from traditional account in one year to cash basis the following year but HMRC cannot advise you on whether to do this or not as this relates to financial advise which we are not autorised to give.
Thankyou.