Jonathan Yeomans, tax technical officer at untied, the UK’s personal tax app, comments on the government announcement on simplified tax reporting for self-employed and small businesses:

untied welcomes the most recent consultation from HM Treasury to overhaul the tax system and make reporting for self-employed individuals and small business simpler.

Tax simplification is at the heart of our mission, removing admin and time from both taxpayers and HMRC. We also recognise the added simplification for many businesses of aligning their accounting periods with the actual tax year.

We note that the timing of any transition will be critical and needs to be done with caution and sensitivity.

At the moment, if a business changes its accounting date to match the tax year, they may have to pay extra tax; the mechanisms can mean waiting until the business ceases trading. We are pleased to see that the announcement suggests that measures will be in place to ensure that relief can be obtained quickly and will be poring over the details as they emerge. It is essential that no business ends up paying additional taxes as part of the new alignment.

We also note that some businesses are seasonal and their accounting period won’t naturally fall into line with a given date. The government will need to make sure that these businesses are not inconvenienced or financially disadvantaged by these changes.

Advisers will also have concerns of the implications of aligning year ends and the workloads and deadlines that will involve.

We are currently seeing a flurry of similar consultations. This process has been launched soon after the close of the call for evidence around the tax administration framework and timely payments, and before the results from those reviews have been published. untied responded on both those consultations, including providing our thoughts on basis periods and simplifications around the end of the tax year. We are also awaiting a report from the Office of Tax Simplification on similar themes, with a proposal to move the tax year end to either 31 March or 31 December. Given that many of the arguments have been prepared, perhaps that’s why the six-week period for this latest consultation is half the government’s recommended minimum 12 week period.

As untied, we will be speaking widely with our users, advisers and partners to make sure their views are also understood and heard in our own response.


For further information:

Chantal Heckford