The Government has announced reforms to the tax system to make it easier for small business and self-employed individuals filling out their tax returns. The changes will come into force in 2023 and see businesses and freelancers taxed on profits arising in a tax year, rather than profits of accounts ending in the tax year.
Current rules can often lead to thousands of unintentional errors and mistakes in self-employed tax returns every year because of the cut-off dates and timing of deadlines.
Jesse Norman, financial secretary to the Treasury added: “Simplifying them (tax returns) will allow self-employed people to spend less time doing tax admin and more time growing their business and creating jobs.”
Currently, businesses that draw up their accounts to a different date to the end of the tax year (5 April) pay for their first tax year to its end and then on the basis of their full accounting year for subsequent years, meaning profits are taxed twice, for which they can apply for relief.
Critics say that changes would see the self-employed pay extra as the changes are brought about, with about a fifth of self-employed people expected to be hit by the extra one-off costs involved in familiarising themselves with the new system and updating software.
If you need expert tax advice or guidance for your business, contact us on Afford Bond Nantwich Accountants T: 01270 623731 or Afford Bond Wilmslow Accountants T: 01625 416380 – or use the Contact Us form here on our website www.affordbond.com
Talk to us about your tax return.