In line with the government’s aim to simplify tax, partners in partnerships which have adopted simplified expenses for income tax purposes will be eligible for fixed-rate deductions from the new tax year, as set out in draft Finance Bill 2016
This measure is introduced to clarify how the simplified expenses regime should be applied by partnerships in respect of the business use of a home and where premises are used both for business and as a home.
These amendments have been introduced to ensure that partnerships can fully access the simplified expenses regime that was introduced by Finance Act 2013.
They also set out rules whereby an individual or partnership has more than one premises that are used both for business and as a home. In this instance, any claim to use the simplified expense deduction in respect of the expenses of these premises must be applied to all such premises.
As announced at Autumn Statement 2014, legislation will be introduced in Finance Bill 2016 for simplified expenses in sections 94H and 94I, Income Tax (Trading and Other Income) Act 2005. The amendments are meant to make it easier for partnerships to take advantage of the simplified expenses rules. The new rules are set out in draft Clause 20.
The measure will come into force from 6 April 2016.
The first returns where this new measure can apply will be for the 2016-17 tax year which are due to be filed by 31 January 2018.
Further details are available here