The Government announced on 20th July 20201 that there will be reforms to the tax system in order to make it easier for the self-employed and small businesses to fill out their returns by benefiting from a simpler tax reporting rule.
These changes will come into effect by 2023, and this will mean that businesses will instead be taxed on profits in a tax year, rather than the profits of accounts ending in the tax year. This will reduce the amount of time spent on filing taxes as the self-employed profits will be taxed will be aligned with other forms of income (such as property and investment income).
The Government has also announced new measures that will help to clamp down on those who promote tax avoidance, this will include the support of taxpayers in order to help them steer clear and to also allow new powers that will allow HMRC to stop offenders.
Jesse Norman, The Financial Secretary to the Treasury, said: “These complex rules lead to thousands of errors and mistakes in self-employed tax returns every year. Simplifying them will allow self-employed people to spend less time doing tax admin and more time growing their business and creating jobs”.
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