Consultation outcome

Basis period reform - consultation

This consultation has concluded

Download the full outcome

Detail of outcome

Legislation will reflect feedback received during the consultation. Respondents recognised our intention to simplify the taxation of trading profits and most agreed that the reform was a simplification for the great majority of affected businesses. Respondents raised concerns, such as the timing of reform and the use of provisional figures in returns.

The reform’s implementation has been delayed by a year, meaning the transition to the new rules will take place in 2023 to 2024 and the new rules will come into force on 6 April 2024. You can read about more changes in the summary of responses published on this page.

You can also read the tax information and impact note.


Original consultation

Summary

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 ran from
to

Consultation description

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.

Documents

Published 20 July 2021
Last updated 4 November 2021 + show all updates
  1. Published an outcome summary and the summary of responses to the consultation.

  2. First published.