Government reveals new tax system reforms for businesses

The government has announced reforms to the tax system that will make the returns process easier for small businesses.

The reforms, announced today (20 July), will come into effect by 2023, will mean that businesses will be taxed on profits during a tax year, rather than profits of accounts ending in the tax year.

The government has said that the changes will bring self-employed profit reporting in line with other forms of income.

It added that the new system will prevent “thousands” of errors every year.

Jesse Norman, financial secretary to the Treasury, commented: “These complex rules lead to thousands of errors and mistakes in self-employed tax returns every year.

“Simplifying them will allow self-employed people to spend less time doing tax admin and more time growing their business and creating jobs.”