From April 2023 we will see a fundamental shake up of the rules dictating when the trading profits of unincorporated businesses are subject to income tax. Under legislation included in clause 7 and Sch 1 of Finance (No 2) Bill 2021 the current basis period rules which date back to the 1990s will be abolished from April 2024 and replaced with a tax year basis of assessment. Tax year 2023-24 will act as a ‘transitional year’ when we switch over from the current rules to this new basis of assessment.
This change will make little or no difference to those businesses which already draw up their accounts to 5 April or 31 March – HMRC estimates that this encompasses 93% of sole traders and 67% of partnerships. For the remaining minority of businesses however the planned changes are very significant and could...
Please reach out to customer services at +44 (0) 330 161 1234 or 'customer.services@lexisnexis.co.uk' for further assistance.