Policy paper

Income Tax: basis period reform

This measure intends to reform basis periods for Income Tax for the self-employed, it also launches a consultation on how to implement reform.

• From: HM Revenue & Customs
• Published: 20 July 2021

Documents

Income Tax: basis period reform

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Clause 1: Draft legislation

PDF, 102 KB, 8 pages

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Clause 1: Explanatory note

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Clause 2: Draft legislation

PDF, 51.1 KB, 1 page

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Clause 2: Explanatory note

ODT, 11.5 KB

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Details

The proposal changes the basis period rules from a ‘current year basis’ to a ‘tax year basis’. The transition would take place from 2022 to 2023. The changes would come into effect from 2023 to 2024.

A business’s profit or loss for a tax year would be the profit or loss that occurs in the actual tax year itself, regardless of its accounting date.

Read the ‘Basis period reform’ consultation.

Published 20 July 2021