HMRC launches consultation on basis period reform

21 Jul 2021

HMRC has recently launched a consultation on how basis periods can be reformed for income tax for the self-employed.

The consultation seeks to gather views on how best to implement a proposal to simplify the rules under which profits of an unincorporated trading business are allocated to tax years using basis periods.

In the consultation, the current rules for basis periods are outlined, alongside a specific proposal to simplify them and suggestions regarding transitional rules for moving to a new system.

HMRC hopes to simplify the system before Making Tax Digital (MTD) is implemented.

The proposal affects the self-employed, partnerships, trusts and estates with trading income. It mainly affects unincorporated businesses that do not draw up annual accounts to 31 March or 5 April, and those that are in the early years of trade.

HMRC stated that it would like to gather views on the matter from businesses, advisers, tax software providers and representative bodies. The consultation can be found here.


xero quickbooks.png sage.png kashflow.png
Copyright

© 2021 Mark J Rees LLP. All rights reserved.

We use cookies on this website, you can find more information about cookies here.
Contact Us

Please call:
0116 2549018

Address
Mark J Rees LLP, Granville Hall, Granville Road, Leicester, Leicestershire LE1 7RU

Mark J Rees LLP is a Limited Liability Partnership Registered in England & Wales Number OC362074. A list of members’ names is available at the business address. MJR, Mark J Rees and MJR Wealth Management are trading styles of Mark J Rees LLP which is registered to carry on audit work in the UK by the Institute of Chartered Accountants in England and Wales and authorised and regulated by the Financial Conduct Authority.

‘Partner’ refers to a director of a corporate member.