Basis period reform: a simplification with complications

The publication of HMRC’s consultation and accompanying draft legislation on 20 July 2021 set out the parameters for what is one of the most fundamental changes to personal tax in 25 years i.e. since the introduction of self-assessment which saw the last change to basis periods. Basis period reform was included in the Treasury’s call for evidence published in March 2021 that set out a ten-year strategy to create a tax system for the 21st century. It was also the subject of a previous consultation in 2017 and it links in with the reforms for making tax digital (MTD). So while the proposals are still draft their introduction would seem to be inevitable and we expect them to be implemented in their current...