You can elect to have more of your unspread 2023 to 2024 transition profit taxed in a particular year than the default 20% slice. It saves tax when that year’s income is lower, or will be taxed at a lower rate, than the later years the profit would otherwise fall into. The election is made on the tax return for the year, by the first anniversary of its normal filing date, so for 2024 to 2025 the deadline is 31 January 2027.

What does an acceleration election do?

Transition profit from basis period reform is spread by default over five tax years, from 2023 to 2024 to 2027 to 2028 (Finance Act 2022, Schedule 1, paragraph 72). How the default works is explained in spreading transition profits over five years.

Paragraph 73 lets a trader who is charged on a slice in a tax year elect for an additional amount to be treated as arising in that year. The election must state the amount, which can be any part of the transition profit not previously charged. Later slices then shrink automatically: for each subsequent year the transition profit is treated as reduced by A x 5/T, where A is the extra amount accelerated and T is the number of spreading years left after the year of the election. HMRC sets out the formula and examples at BIM81310.

In HMRC’s Example 21, a trader with £30,000 of transition profit is taxed on £6,000 in each of 2023 to 2024 and 2024 to 2025. They elect to add £3,000 in 2025 to 2026, so £9,000 is taxed that year. The transition profit for later years is reduced by £3,000 x 5/2 = £7,500, to £22,500, so the slices for 2026 to 2027 and 2027 to 2028 are £4,500 each. The total taxed is still £30,000; only the timing has moved.

When can accelerating save tax?

The election never changes the total profit taxed. It only saves money where the same pound of profit would bear less tax in an earlier year than a later one. The usual situations are:

  • A low income year. If your other income in a year leaves part of your personal allowance or basic rate band unused, bringing more transition profit in can use it. For 2026 to 2027 the personal allowance is £12,570 and the basic rate band covers taxable income up to £50,270 (rates differ in Scotland).
  • Profits expected to rise. If later years are likely to be taxed at 40% or 45%, accelerating into a basic rate year can save the difference.
  • Staying under £100,000 later. The personal allowance is reduced by £1 for every £2 of adjusted net income above £100,000. HMRC’s worked example at BIM81320 shows a £4,000 slice costing £2,000 in tax because of that taper. Moving the slice to a year below the threshold can avoid it.
  • Planned cessation. If the trade stops before the end of the spreading period, the whole unspread balance is taxed in the year of cessation (paragraph 72(6)). Spreading some of it into earlier years can stop it all being bunched into one final year. See stopping self employment.

Where a year is loss making, remember that losses brought forward can be set against the transition slice (box 73.4 of the self employment full pages), so accelerating into such a year may simply absorb losses that would otherwise relieve later profits. Run the numbers for both years before deciding.

When does accelerating not help?

If your income is steady and taxed at the same marginal rate every year, accelerating only brings tax forward. You lose the cash flow benefit and, because payments on account are each 50% of the previous year’s liability less tax deducted at source (section 59A of the Taxes Management Act 1970), a bigger bill this year also raises next year’s payments on account. You can claim to reduce them if they will be too high; see reducing payments on account.

National Insurance also applies. HMRC’s notes confirm transition profits are included in taxable profits for National Insurance purposes. For 2026 to 2027, Class 4 is 6% between £12,570 and £50,270 and 2% above, so moving profit into a basic rate year can increase Class 4 even while it cuts income tax.

How do you make the election?

The election is made through your Self Assessment return for the year in which you want the extra amount taxed. HMRC’s notes to the self employment (full) pages say to enter the full amount of transition profit chargeable in the year, the normal slice plus the accelerated amount, in box 73.3, and to give full details of the election, including the amount accelerated, in box 103 “Any other information”. For 2023 to 2024, HMRC’s guidance gave the same approach: enter the higher amount and explain it in the “Any other information” box.

The transition profit belongs to the individual. Paragraphs 64 and 73 apply to a person carrying on a trade alone or in partnership, so each partner decides for themselves and makes the election on their own return.

What is the deadline?

Paragraph 73(2) requires the election to be made on or before the first anniversary of the normal Self Assessment filing date for the tax year to which it relates. The normal online filing date is 31 January after the end of the tax year. That gives:

Tax year of election Normal filing date Last date to elect
2023 to 2024 31 January 2025 31 January 2026 (passed)
2024 to 2025 31 January 2026 31 January 2027
2025 to 2026 31 January 2027 31 January 2028
2026 to 2027 31 January 2028 31 January 2029

2027 to 2028 is the final spreading year, when the whole remaining balance is charged anyway. Because the deadline is a year after the filing date, an election for a year whose return has already been filed is usually made by amending that return, which you can normally do within 12 months of the filing deadline. Our guide to amending a Self Assessment return explains the process.

What does a saving look like?

Illustration only. A sole trader in England had transition profit of £20,000, taxed at £4,000 a year. By 2026 to 2027, £12,000 has been taxed, leaving £8,000. They take a long career break and their 2026 to 2027 trading profit is only £8,000. They expect profit of £60,000 in 2027 to 2028. Assume 2026 to 2027 rates and bands also apply in 2027 to 2028.

  • No election: the 2026 to 2027 slice of £4,000 takes total income to £12,000, within the personal allowance, so no tax. The final £4,000 is taxed in 2027 to 2028 on top of £60,000, at 40%: £1,600.
  • Election to accelerate £4,000 into 2026 to 2027: £8,000 of transition profit is taxed that year. Income is £16,000, so £3,430 is taxed at 20%: £686. Nothing is left for 2027 to 2028.

Income tax falls by £914. Class 4 rises by about £126 (6% of £3,430 in 2026 to 2027, against 2% of £4,000 in 2027 to 2028), so the net saving is roughly £788.

What mistakes should you avoid?

  • Missing the window. The 2023 to 2024 deadline has passed. The 2024 to 2025 deadline is 31 January 2027.
  • Entering only the extra amount. Box 73.3 takes the total for the year, slice plus acceleration.
  • Not recalculating later slices. Each election reduces the base for later years under the A x 5/T formula; keep a running record.
  • Ignoring Class 4 and payments on account. They can wipe out a small income tax saving.
  • Assuming you can reduce a slice. The election can only increase the amount taxed in a year, never defer it.

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Reviewed by Christine Anderson, Broker, Solar Protect. Last reviewed 19 October 2026. Part of Accountapedia, the Solar Protect guide to UK tax and accounting. This page is general information, not personalised advice.