Basis period reform - consultation
We welcome your views on how to implement a simplification of the way trading profits of businesses are allocated to tax years under Income Tax Self Assessment.
This consultation proposes a simplification of the income tax rules for allocating trading profit to tax years, making the rules fairer for small businesses, more logical and easier to understand. The government intends to deliver reform to simplify the system before Making Tax Digital for Income Tax is implemented.
The consultation focuses on the detailed design of the proposal, exploring which businesses are most likely to be affected, what benefits the proposal is likely to bring and how best to minimise the downsides.
The consultation will be of interest to self-employed people and partners in partnerships, trading trusts and estates, and some non-resident companies. We would like to hear from these businesses, their advisers, representative bodies, tax software providers and any other interested parties.
We have also published draft legislation alongside this consultation.