Draft Statutory Instrument 2017: Increasing cash basis thresholds for unincorporated businesses
We understand that the Government wants to encourage small businesses to use the cash basis as this may help with quarterly reporting under the proposed Making Tax Digital for Businesses. However, we remain concerned that until there is full alignment between the cash basis used for reporting tax to HMRC and the cash basis used by the Department for Work & Pensions for self-employed universal credit claimants, then there will still be a significant additional administrative and cost burden on these claimants.
As these new rules are being introduced from 6 April 2017 we recommend that guidance and publicity about the increased thresholds are provided as soon as possible as landlords and the self-employed will need to consider whether to keep their business records using the cash basis or the accruals basis at or before the start of the new tax year.
The LITRG submission can be found here: Draft Statutory Instrument 2017: Increasing cash basis thresholds for unincorporated businesses – LITRG response