HMRC has confirmed that it can only make the calculations based on information submitted by taxpayers as part of previous year tax returns. This follows the launch of the online overlap relief tool last month.

‘If this information has not been submitted in tax returns, HMRC will not be able to provide it. However, in these circumstances, it may be possible to provide historic profit figures, to allow overlap relief to be recalculated,’ HMRC told employers in the latest bulletin.

The correct calculation of overlap relief is a critical element of the changes to basis period reform, which affect tax years from 1 April 2023 and means many taxpayers will have to calculate and report transition profit.