Released 20 July 2021
The Government has announced reforms to the tax system that will make it easier for small businesses to fill out their returns.
The changes, which will come into force by 2023 and have been drawn-up alongside representatives of small businesses, will mean businesses will be taxed on profits arising in a tax year, rather than profits of accounts ending in the tax year. It should help them spend less time filing their taxes – aligning the way self-employed profits are taxed with other forms of income, such as property and investment income.
In line with the Tax Policy Making framework, HMRC have published draft legislation for inclusion in Finance Bill 2021–22. This allows for technical consultation and provides taxpayers with predictability over future tax policy changes. The consultations on the draft legislation will run until 31 August 2021.
Further details can be found at https://www.gov.uk/government/news/government-announces-simplified-tax-reporting-for-self-employed-and-small-businesses. Details of the consultation, including a link to the consultation document, can be fund at https://www.gov.uk/government/consultations/basis-period-reform.