The Association of Taxation Technicians (ATT) has called for a delay to a “major change” in how trading profits are assessed for tax purposes.
The body has also urged for increased consultation time, as well as a clear roadman, leading up to the introduction of the proposals.
The calls come in response to a recent HMRC proposal that stated from 6 April 2022, the profits of all unincorporated businesses should be assessed on the profits they actually earn in any tax year to 5 April, or 31 March.
Current rules see businesses pay tax on profits earned in their accounting year ended within that tax year.
While those businesses that already have a year end of 5 April or 31 March will likely see little change, the ATT claimed that the “changes are very significant” for those who do not align with the tax year.
In turn, the ATT has issued concerns that advisors will not have enough time to provide feedback to government before the switch.
Jon Stride, co-chair of ATT’s technical steering group, said: “The proposal to tax businesses on profits arising in the tax year itself is sensible and will eventually simplify matters for unincorporated businesses.
“But it is vital that the design and implementation is fully considered and not rushed if it is going to work for businesses and the Government.”
He added: “Provided that the commencement date can be pushed back, the ATT recommends an extension of the consultation deadline to 30 September 2021.”