‘We need basis period reform before Making Tax Digital for income tax self assessment comes in. The view of stakeholders is that the sequency point is fairly clear. We do not want to hard wire in complexities to Making Tax Digital,’ said Bridget Micklem, deputy director, business profits at HMRC. ‘It is critical to implement before Making Tax Digital, the risk is that complexity is created – we want to solve the tax code issue first.’

Addressing the House of Lords economic affairs committee on the Finance Bill, four HMRC witnesses have been justifying the reasons for basis period reform, rejecting claims that the rule change was an afterthought.