HMRC Business Tax Changes - income tax payments

HMRC Seeks to Change Self Employment Dates

Cressida Johns Business Advice

Full article with thanks to: HMRC is consulting on changes that will affect the income tax payments of many sole traders and partners. The aim of these changes is to align the filing dates for the Making Tax Digital regime. If the changes take effect, some taxpayers will see higher tax bills in 2022/23. What is their current position? Businesses draw up their accounts each year to a particular date, known as the accounting date. They often can choose their own accounting date, which is not necessarily the same as the date on which the tax year ends. Currently, sole traders and partners pay income tax based on the accounting period which ends in the tax year. For example, a business that produces accounts to the 30 April 2021 will pay tax for 2021/22 based on those accounts, also known as the current year basis. In the early years …