Basis Period Reform For Income Tax

This measure will only affect businesses which operate as self-employed traders, partnerships or other unincorporated entities such as trusts and estates and non-resident companies and which draw up annual accounts to a date different to 31 March or 5 April, and businesses that commence from 6 April 2024.

It will represent a significant change for these businesses and for those whose profits are significantly higher than when they first started in business, will result in additional tax charges being crystallised, which will therefore need careful planning and understanding.

There are transitional rules which allow spreading of the extra tax over 5 years but even so early discussion and quantification would be of benefit to look at any tax planning opportunities and to plan cash flows.

Further details can be found at the link below;