For Immediate Release
Would You Welcome a Change to the Tax Year?
Latest Survey Suggests Year-End Change Welcomed by Small Businesses
With a tax year beginning on 6th April, the UK tax year has long been an international anomaly. However, a recent study has shown that there is widespread support across the UK business sector to change the tax year to be more in line with the rest of the world. David Redfern, tax preparation specialist and director of DSR Tax Refunds Ltd, looks at the latest study and explains what a change to the tax year could mean for UK companies.
The UK tax year runs from 6th April to the following 5th April and has done so since 1752, but this is in stark contrast to the situation in the rest of the world with most countries, including the US, Canada, Germany and France, having a tax year which runs from 1st January to 31st December. A recent study by accounting firm BDO has demonstrated that most UK businesses back a change to the UK's tax year to bring it in line with the tax accounting situation in most other countries. Redfern stated "The UK's tax year is anomalous when looking internationally, with most countries favouring a tax year that runs in line with the calendar year. Even Australia, which runs its tax year from July to June, at least doesn't split months - the UK is the odd-one out, not only because of its April start but also that it splits the month of April between two tax years, which just adds to the complexity of tax accounting. This latest survey shows that many businesses, especially those with an international presence, would welcome a change to the tax year to bring it in line with the international majority".
The tax year survey, which gathered the opinions of 500 UK companies with a revenue between £10M and £300M, showed that 91% of small businesses in the UK would favour a change to the tax year. Redfern stated "Not only would a change make things simpler for small businesses, but those with international subsidiaries would find it particularly beneficial in aligning their accounting across the board. It would also make things simpler for HMRC to bring into line internationally, especially when dealing with companies which also have an international foothold. Of course, the last thing that business needs right now is additional administrative burden but certainly consulting on a change would be a welcome first step".
Changing the tax year would be a complex process, with particular impacts on areas such as pensions and payroll, with most accounting processes working around a 6th April start date. Redfern stated "The Office for Tax Simplification is currently exploring whether there is any potential to change the UK tax year and those more complex areas, especially surrounding pensions, will need thorough consideration before any definitive decision is made but it is to be hoped that the voice of small business is heard - in order for UK businesses to prosper and thrive going forwards, difficult decisions may have to be made and once we are past the worst of the Covid19 pandemic, aligning our businesses with international convention could have the potential for a brighter future". The Office for Tax Simplification is an independent adviser to the UK government and looks at ways to simplify the tax system for businesses and individual taxpayers.
Contractors, especially those working within the construction industry, who have yet to act on their tax return for the tax year ending on 5th April 2021 are encouraged to contact DSR Tax Returns Ltd on 0115 795 0232 or via their website for help with their tax returns and refunds.
About DSR Tax Refunds Ltd
DSR Tax Refunds Ltd is a firm of tax preparation experts who specialise in CIS tax returns for construction workers working within the Construction Industry Scheme (CIS) as well as employees who are eligible to claim a tax refund for their work-related expenses, including employees working from home as a result of the Covid19 pandemic. Their friendly and helpful team can help with all relevant paperwork to ensure clients claims are handled in an accurate and efficient manner.
For more about DSR Tax Refunds Ltd, visit https://tax-refunds.co.uk/
For media enquiries, please email info@tax-refunds.co.uk or call 0115 795 0232
DSR Tax Refunds Ltd
Registered Office: Ground Floor, Seven Mile House, 1 Mansfield Road, Papplewick, Nottingham, NG15 8FJ