The House of Lords sub-committee for the Finance Bill is planning to investigate income tax basis period reform and has appealed for written submissions on the proposed changes.
In its inquiry into the draft Finance Bill 2021/22, the sub-committee is asking for written evidence from individuals and businesses that will be affected by the changes.
Arriving ahead of the Making Tax Digital for Income Tax Self Assessment (MTD for ITSA) scheme in April 2023, the reform would align all businesses' accounting periods with the tax year to, in the words of HMRC, "simplify the taxation of trading profits"
The sub-committee wants to know to what extent the reform represents a "useful simplification" of the tax system that also delivers fairer results than the current rules.
It also wants to know if the transitional provisions are robust enough, how manageable the timetable would be with the introduction of MTD for ITSA, and how onerous the reform would be for businesses that don't align their accounting period with the tax year.
Lord Bridges of Headley, chair of the sub-committee, said:
"It is important that the Government gets these changes right.
"To inform our work we want to hear from as broad a range of people and organisations as possible. If you have a view on any aspect of these proposals, please let us know what you think."
The call for evidence will close on 13 October 2021.
Talk to us about what the reform could mean for you.
