HMRC Targets The Unrepresented in Basis Period Reform
It's a positive change for most ...
Posted by Helen Beaumont on 28/02/2024 @ 8:00AM
The UK tax system is complex and ever-changing, and in 2024, HMRC will introduce a major change known as Basis Period Reform. This change aims to simplify tax calculations for businesses and individuals, but it has also sparked confusion and concern among unrepresented taxpayers ...
Seeking professional advice about basis period reform can save you time, money, and stress in the long run!
So, what exactly is Basis Period Reform and how will it impact UK taxpayers? Currently, taxpayers in the UK can choose their yearend and draw up accounts to that year end annually. Tax is then accounted for on the profits and losses arising during that year.
"This period is known as the basis period!"
Under the current system, taxpayers with a 30th of April year-end have a full 20 months to prepare their tax returns. However, those with a different year-end, such as 31st March, have a shorter period to report their income and expenses.
Basis Period Reform will change this by aligning the basis period with the tax year for businesses. This means that all taxpayers, regardless of their year-end, will have 10 months to prepare their tax returns. This change is expected to simplify tax calculations and reduce the burden on taxpayers.
While Basis Period Reform may seem like a positive change, it has raised concerns for unrepresented taxpayers. These are individuals and small businesses who do not have an accountant or tax advisor to assist them with their tax affairs.
If you are an unrepresented taxpayer, it is crucial to understand the implications of Basis Period Reform and take necessary steps to prepare for the changes:
Firstly, it is recommended to start keeping accurate and up-to-date records of your income and expenses. This will ensure that you have all the necessary information when it comes to preparing your tax return.
Secondly, consider seeking professional advice from a tax advisor or accountant. They can help you understand the changes and assist you in preparing your tax return accurately.
Lastly, it is essential to plan ahead and budget for any potential increase in tax bills. By staying organised and informed, unrepresented taxpayers can navigate Basis Period Reform and avoid any surprises when it comes to tax time.
It is no secret that HMRC is targeting unrepresented taxpayers with Basis Period Reform. This is evident in their recent efforts to encourage individuals and businesses to seek professional tax advice.
Basis Period Reform is a significant change to the UK tax system, and it is essential for all taxpayers to understand its implications. Unrepresented taxpayers, in particular, must take the necessary steps to prepare for the changes and seek professional advice if needed.
Remember, preparation is key; and seeking professional advice can save you time, money, and stress in the long run.
Until next time ...
HELEN BEAUMONT
Would you like to know more?
If anything I've written in this blog post resonates with you and you'd like to discover more about basis period reform and how it may affect you as an unrepresented self-employed person or small business owner, it may be a great idea to give me a call on 01908 774323 and let's see how I can help.
Helen brings the personal tax planning experience of the top 20 tax companies to Essendon. Formerly of MacIntyre Hudson (with 45 offices nationwide), Helen worked at Chancery for more than 10 years before joining Essendon as the personal tax specialist.
Tax Planning can make a considerable difference to your tax liability. Helen has specialist knowledge and experience in tax planning and uses every opportunity to minimise your tax bill is utilised. By analysing your investments, income, profit and expenditures, Helen will provide strategic tax planning expertise that could offer significant savings, whilst delivering clear, honest advice and guidance.
When Helen is not at Essendon she spends time with her young son and likes going on long walks with the family dog.
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