The government has announced changes to the tax system that will make it easier for small businesses to fill out their returns.
The changes, which will come into force by 2023, will mean businesses will be taxed on profits arising in a tax year, rather than profits of accounts ending in the tax year.
HMRC aim to help taxpayers spend less time filing their taxes – aligning the way self-employed profits are taxed with other forms of income, such as property and investment income.
The government also announced new measures to clamp down on promoters of tax avoidance, including supporting taxpayers to steer clear and new powers that will allow HMRC to stop offenders.
Financial Secretary to the Treasury, Jesse Norman, 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.’
“Simplifying the tax system for the self-employed and small businesses will be a great help, allowing them to spend less time preparing tax returns and more time earning.”Nigel Holland