As part of the Making Tax Digital regime, the Government was due to reform the basis period rules from April 2023, in a bid to simplify how unincorporated businesses, sole traders and partnerships, allocate trading profits to tax years for inclusion on their self-assessment returns.
Unincorporated businesses are currently taxed on the profits of their accounting period ending in the tax year, whereas under the new proposals they will be taxed on the profits arising in the tax year.
Alongside the postponement of Making Tax Digital for Income Tax Self-Assessment, this reform has also now been delayed until April 2024.
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