Released 20 July 2021
The Association of Taxation Technicians (ATT) is calling for a delay to a major change in how trading profits are assessed for tax purposes, as well as appealing for more consultation time and a clear roadmap leading up to the proposed introduction of the proposals.
The ATT worries that advisers to affected businesses will not have time to give enough feedback to government before the change comes in – and the pace of change may overwhelm many businesses.
In a consultation document published alongside draft legislation, HMRC propose that from 6 April 2022, the profits of all unincorporated businesses should be assessed on the profits which they actually earn in any tax year to 5 April (or 31 March).
Under current rules, businesses pay tax on the profits earned in their accounting year which ends in that tax year. The change to basis periods is due to come in a year before the introduction of Making Tax Digital for Income tax (MTD for Income Tax) in April 2023.
For further details, see the ATT news release (20 July 2021) at https://www.att.org.uk/technical/news/call-delay-major-change-how-profits-are-taxed.