Consultation launched on self-employed basis period reform
The self-employed basis period consultation will seek to gather views on how best to implement a proposal. Through these views, they will look at how to simplify the rules under which profits of an unincorporated trading business are allocated to tax years using basis periods. The consultation also includes suggestions regarding transitional rules for moving to the new system.
HMRC aims to simplify the system before Making Tax Digital (MTD) for income tax is implemented.
MTD is a key part of the government’s plans. It aims to make it easier for individuals and businesses to get their tax right. In addition, it will help them keep on top of their affairs.
The proposals affect the self-employed and partnerships with trading income. It mainly affects unincorporated businesses that do not draw up annual accounts to 31st March or 5th April and those that are in the early years of trade.
HMRC stated that it would like to gather views on the matter from the following:
Businesses, advisers, tax software providers and representative bodies.
Following the consultation’s conclusion, the government will consider whether to publish a summary of responses. Alongside this is any decision on the detailed implementation of the proposal. If so, this will be announced later in the year.
Danielle Harvey of Harvey, Telford & Bates comments on the consultation:
“Any proposal that is a result of this consultation may affect you and your business. Therefore, you may require guidance on following any new rules set out for self-employed basis periods. At Harvey, Telford & Bates it is possible that we can help guide you through this. If you would like assistance on this or any other of our services we are on hand to assist you.”
If you would like our assistance or to speak to our expert team, please call us on 01743 462604 or email us at [email protected] .
For more information on the government’s basis period reform consultation, please click here