Lee Sharpe looks at the latest developments in the withdrawal of basis period taxation for income tax purposes.
In a previous article, I looked at the government’s draft proposals for the reform (i.e., withdrawal) of basis period taxation for trades subject to income tax. The draft bill clauses picked up several amendments during their passage through parliament, thanks in no small part to lobbying efforts by the professional bodies.
Finance Act 2022 received Royal Assent on 24 February 2022, and the clauses as updated now comprise FA 2022, s 7, Sch 1. This article considers the key developments, concentrating on the work required in the transition phase of businesses and their advisers, and any effects on overlap profits for businesses that have not followed a tax year end.
Overview: Deriving transition profits
The plan is for all businesses to
