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Goodbye basis periods!

Shared from Tax Insider: Goodbye basis periods!
By Lee Sharpe, July 2024

Lee Sharpe considers some practical aspects of the forced alignment of basis periods to tax years. 

HMRC requires the homogenisation of taxable profit reporting schedules for all taxpayers subject to income tax so that its IT systems can cope with the new quarterly update cycle under ‘making tax digital’. There is no point pretending that there is any meaningful benefit in this huge upheaval to anybody except HMRC; while the government has tried to pass it off as being ‘fairer’ and ‘easier’ for businesses, that would effectively be to pretend that some businesses had been forced to adopt a basis period that did not actually suit them in the first place (before the introduction of this new regime in FA 2022 s 7, Sch 1, I mean). 

The tax year 2024/25 is the one from which trading profits on all income tax returns must be made to a tax period ending on (or between) 31 March or 5 April. But the real

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