Hidden away in the detail of the measures, and in line with the government’s objective to simplify tax administration, the £150,000 threshold for individuals with income taxed only through PAYE to file a self-assessment tax return will be abolished altogether from the 2024/25 tax year. This change will remove the requirement for up to 338,000 taxpayers to submit a tax return.
In addition to this, there is another considerable simplification for the self-employed; all self-employed traders will now be able to pay tax on the ‘cash basis’ – the net cash they receive – rather than the more complicated accounting ‘accruals basis’, which taxes businesses on accounting rather than cash profits. Up to now, this simpler basis had been restricted to only the smallest businesses; by making this change more businesses will benefit from the administrative relaxation. Worry about having to comply with the more costly and complex requirements of accrual accounting will no longer act as a disincentive to growth.
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Autumn Statement 2023: Hidden simplifications
Hidden simplification measures.
Hidden away in the detail of the measures, and in line with the government’s objective to simplify tax administration, the £150,000 threshold for individuals with income taxed only through PAYE to file a self-assessment tax return will be abolished altogether from the 2024/25 tax year. This change will remove the requirement for up to 338,000 taxpayers to submit a tax return.
In addition to this, there is another considerable simplification for the self-employed; all self-employed traders will now be able to pay tax on the ‘cash basis’ – the net cash they receive – rather than the more complicated accounting ‘accruals basis’, which taxes businesses on accounting rather than cash profits. Up to now, this simpler basis had been restricted to only the smallest businesses; by making this change more businesses will benefit from the administrative relaxation. Worry about having to comply with the more costly and complex requirements of accrual accounting will no longer act as a disincentive to growth.
