HM Revenue & Customs (HMRC) have released their 'Consultation outcome: Basis period reform'. The responses cover the proposed changes to the basis period rules which affect unincorporated businesses. The proposal to align the tax and accounting years for unincorporated businesses will be included in Finance Bill 2022.

The Consultation responses are summarised as follows:

Next steps

Useful guides on this topic

Accounting periods and tax basis periods
Which date do I choose? Does it matter? Can I change my accounting date? What changes are proposed as a result of the reform of basis periods?

Consultation: Income Tax Basis Period reform
HMRC have published a new consultation ‘Basis period reform’ alongside a policy paper and draft legislation that propose a simplification of the Income Tax rules for the self-employed by allocating trading profit to tax years regardless of the business’ accounting period end date.

Basis period reform: What could it mean for MTD?
Proposed changes to the basis period rules, which are currently being consulted on, could result in some self-employed businesses being mandated into Making Tax Digital for Income Tax sooner than expected.

Call for evidence: Basis Period Reform
The House of Commons' Finance Bill Sub-Committee has issued a call for evidence seeking views on the draft legislation published in Finance Bill 2022 for the Reform of Basis Periods and the Uncertain Tax Treatment provisions.

External Links

Consultation outcome: Basis period reform

Consultation: Basis period reform

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