The new rules will not change the accounting period of the business, however the tax position will move from a current year basis to a tax year basis. This will mean that  business profits will be calculated for the tax year rather than for the period of account ending in the tax year. 

Business owners will need to consider their options and creating a cash-flow forecast will reveal the peaks and troughs in your bank balances and give you time to consider your choices.

Whisper it quietly but we may be approaching the end of the major disruption to the economic activity of the past two years. This would be great news for those trades badly affected by previous lockdowns and other restrictions.

The policy aims to provide a cash flow benefit to businesses by providing additional relief for trading losses, thereby generating repayments for tax paid for two additional years.

Whilst HM Government’s tougher restriction measures at the start of 2021 will continue to have an adverse impact for many people and businesses, there are reasons why the outlook for 2021 is more positive.