Important not to rush basis period reform, say professional bodies

The professional bodies have written to Jesse Norman financial secretary to the Treasury about the proposed reform of the basis period rules and its interaction with the introduction of making tax digital for income tax self-assessment (MTD for ITSA) from April 2023.

The letter outlines their concerns over the proposed timetable for these changes and highlights that a rush to implement them too quickly especially on the back of Brexit and the pandemic risks undermining the integrity of the tax system.

The organisations welcome the simplification basis period reform will bring for some businesses but say it will add complexity for others ‘particularly those with international connections who cannot change their accounting year end to 31 March/5 April’.

Further basis period reform and MTD for ITSA will affect many small and unrepresented businesses many of which will need help either from an agent...