The ATT has published analysis of how income tax basis period reform will interact with the averaging rules for farmers and creative artists. The report helpfully includes two worked examples.
From April 2024, the existing basis period rules (the ‘current year basis’) will be abolished and replaced with a tax year basis of assessment. Under the tax year basis, businesses will be subject to tax on their profits arising in the tax year, regardless of their accounting period end. One area of complexity noted during the consultation on this change was how it would interact with the averaging rules for farmers and creative artists in ITTOIA 2005 Part 2 Chapter 16.
The ATT has published analysis of how income tax basis period reform will interact with the averaging rules for farmers and creative artists. The report helpfully includes two worked examples.
From April 2024, the existing basis period rules (the ‘current year basis’) will be abolished and replaced with a tax year basis of assessment. Under the tax year basis, businesses will be subject to tax on their profits arising in the tax year, regardless of their accounting period end. One area of complexity noted during the consultation on this change was how it would interact with the averaging rules for farmers and creative artists in ITTOIA 2005 Part 2 Chapter 16.
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