Policy paper

Income Tax: basis period reform

This measure intends to reform basis periods for Income Tax for the self-employed, it also launches a consultation on how to implement reform.

Documents

Clause 1: Draft legislation

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Clause 1: Explanatory note

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Clause 2: Draft legislation

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Clause 2: Explanatory note

Request an accessible format.
If you use assistive technology (such as a screen reader) and need a version of this document in a more accessible format, please email different.format@hmrc.gov.uk. Please tell us what format you need. It will help us if you say what assistive technology you use.

Details

The proposal changes the basis period rules from a ‘current year basis’ to a ‘tax year basis’. The transition would take place from 2022 to 2023. The changes would come into effect from 2023 to 2024.

A business’s profit or loss for a tax year would be the profit or loss that occurs in the actual tax year itself, regardless of its accounting date.

Read the ‘Basis period reform’ consultation.

Published 20 July 2021