Draft Finance Bill 2017: Introduction of cash basis for unincorporated property businesses
LITRG cautiously welcomes the introduction of these new rules, as the option to use a simplified accounting basis may be helpful to landlords with the introduction of Making Tax Digital, provided it is not too complex to understand, detailed guidance is available to assist unrepresented landlords and it will not result in an overall tax disadvantage.
However it is unfortunate that there is not consistency of approach between cash basis for unincorporated businesses and that for unincorporated property businesses when deciding which basis of accounting to apply, as this introduces a level of complexity which could have been avoided.
It is imperative that the guidance on the new cash basis for landlords is available, in both digital and non-digital forms, in the very near future as some will need to switch from the accruals basis to the cash basis and so will need to consider what changes they should make to their record keeping procedures before 6 April 2017.
The LITRG submission can be found here:
Sharron West