HMRC basis period reform consultation
Impacting your clients' accounting year-end
What is it?
HMRC's consultation looks at how basis periods can be reformed for the self-employed and other unincorporated businesses such as partners in trading partnerships.
They will need to report income that coincides with the tax year ending 5 April or 31 March, regardless of their current accounting year end date. This transition will happen in the 2022/2023 tax year, ahead of the implementation of Making Tax Digital for Income Tax from April 2024.
HMRC asked for responses to these proposals by 31 August 2021 and this consultation is now closed.
Who will it affect?
The proposal affects
Impact on taxpayers
Impact on accountants
For accountants this means that all your unincorporated clients will have their quarterly reporting and tax year ends at the same time - which means that more work is going to be required during peak tax seasons.
What should you do?
These changes could have a dramatic impact on your clients' businesses, and particularly on your workloads as an accountant.
What you can do to prepare:
- understand the real impact
- incorporate these timelines into your planning
- take part in our survey to voice your opinion on these changes before it’s too late – the closing date is 31 August 2021.
untied will be providing HMRC with a comprehensive response on this consultation. We'd welcome the opportunity to feed your views into this response. Please let us know what you think below.