Finance Bill includes basis period reform rules

The Bill, comprising 102 clauses and 16 Schedules, contains significantly more legislation than previously published on “Legislation-Day” on 20 July, and subsequently, owing to the intervening Autumn Budget. 

ICAEW’s Tax Faculty had responded to key aspects of the draft legislation including:

• basis period reform, which will affect the self-employed and partnerships that do not adopt an accounting year end date between 31 March and 5 April (cl7 and Sch1) (see ICAEW REP 77/21: Basis period reform);
• various measures affecting promoters of tax avoidance schemes (cls84-89 and Sch 12) (see ICAEW REP 85/21: Promoters of tax avoidance schemes);
• notification of uncertain tax treatments by large businesses (cl94 and Sch 15) (see ICAEW REP 86/21: Notification of uncertain tax treatments); and
• the new residential property developer tax (Pt 2 and Schs 7–9) (see ICAEW REP 99/21: Residential property developer tax). 

Measures where there has been no previous draft legislation include:

• extension of the increased rate of annual investment allowance until 31 March 2023 (cl12);
• changes to creative industry reliefs (cls16–22);
• the extended reporting and payment period for property disposals (cl23);
• cross-border group relief changes (cl24 and Sch 4);
• changes to the tonnage tax regime (cl25); and
• expansion of the dormant asset scheme (cl31 and Sch 6). 

Alongside the Bill and explanatory notes, HMRC has also published the consultation outcome for basis period reform. 

ICAEW’s Tax Faculty, together with its active members, will prepare guidance and support on the key changes, including basis period reform in due course.

The faculty will be making representations on the Finance Bill and would welcome any comments – please send them to Peter Bickley.   

Read more: 

• Finance (No. 2) Bill 2021-22
• Explanatory notes 
• Consultation outcome for basis period reform