Tax rule change could increase bills for self-employed workers

Analysis of documents released following Chancellor Rishi Sunak’s Budget show that self-employed workers may face higher tax bills due to a new way of reporting income. The new rules are expected to apply to those who do not already run their annual accounts to March 31 or April 5. While the self-employed report profit and loss for the tax year up to an accounting date, for some this can be different to the tax year. As of 2024 all reporting will have to correspond with the tax year. Peter Miller from the Chartered Institute of Taxation, said: “This change will mean that affected businesses will pay tax on profits for more than a 12-month period in the tax year 2023 to 2024 as they transition into the new ‘tax year basis’.” The shift, which is expected to raise £1.7bn for the Government over the next five years, will affect around 528,000 businesses.

 

Daily Mirror

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