Changes to the tax system that will make it easier for small businesses to fill out their returns have been announced by the government.

The changes, which will come into force by 2023, will mean businesses will be taxed on profits arising in a tax year, rather than profits of accounts ending in the tax year.

It should help taxpayers spend less time filing their taxes – aligning the way self-employed profits are taxed with other forms of income, such as property and investment income.

The government also announced new measures to clamp down on promoters of tax avoidance, including supporting taxpayers to steer clear and new powers that will allow HMRC to stop offenders.

Financial Secretary to the Treasury, Jesse Norman, said: 'These complex rules lead to thousands of errors and mistakes in self-employed tax returns every year.

'Simplifying them will allow self-employed people to spend less time doing tax admin and more time growing their business and creating jobs.'

In a new report, the Federation of Small Businesses (FSB) has called on the government to provide small and medium-sized enterprises (SMEs) with better access to business support and advice.

The FSB stated that the government's levelling-up agenda will 'fall short of improving regional economies' unless more is done to bolster business support for smaller firms.

Within the report, the business group outlined 'significant gaps in business support for SMEs'. 84% of small firms received some sort of business support advice during the coronavirus (COVID-19) pandemic, with 45% of SMEs stating that the advice they were given helped their business to survive. However, many sole traders found that the support was not helpful.

Commenting on the matter, Martin McTague, National Vice Chair of the FSB, said: 'We've endured almost 18 months of this terrible pandemic which has wreaked economic chaos for small businesses all over the country. That's why the support and advice available to them has never been more important.

'For too many, knowing where to look, who to speak to and what to do leads to a dead end and that needs to change. Every day, small firms ask themselves how can I manage my debt? How can we achieve net zero without breaking the bank? Or how can I attract more staff? It's these sorts of questions where the right advice can make huge differences.'

The government is to review the bodies it uses to finance research and development (R&D) in the UK.

It has drawn up legislation to set up a 'blue-skies' scientific research agency that will invest taxpayers' money in cutting-edge technologies such as artificial intelligence.

The new body, called the Advanced Research and Invention Agency, will be given an £800 million budget over four years. The government has said it is committed to increasing public investment in R&D to £22 billion each year.

Commenting on the new strategy, Felicity Burch, Director of Innovation at the Confederation of British Industry (CBI), said: 'This strategy is an important step in ensuring innovation plays its full part in driving economic recovery and addressing the biggest challenges facing society such as decarbonisation, levelling up and health.

'We are pleased to see the scale of ambition and the focus on unleashing business innovation and investment.

'The commitment to increasing investment to £22 billion for R&D provides an important signal to business ahead of the spending review that this government will work with business to deliver on the ambition set out in this strategy.'

HMRC has recently launched a consultation on how basis periods can be reformed for income tax for the self-employed.

The consultation seeks to gather views on how best to implement a proposal to simplify the rules under which profits of an unincorporated trading business are allocated to tax years using basis periods.

In the consultation, the current rules for basis periods are outlined, alongside a specific proposal to simplify them and suggestions regarding transitional rules for moving to a new system.

HMRC hopes to simplify the system before Making Tax Digital (MTD) is implemented.

The proposal affects the self-employed, partnerships, trusts and estates with trading income. It mainly affects unincorporated businesses that do not draw up annual accounts to 31 March or 5 April, and those that are in the early years of trade.

HMRC stated that it would like to gather views on the matter from businesses, advisers, tax software providers and representative bodies. The consultation can be found here.

The Chartered Institute of Taxation (CIOT) has urged the government to use its tax administration review to make the UK tax system easier to navigate for taxpayers.

The CIOT has suggested a handful of 'practical improvements', including developing a single system for taxpayers to use to register and deregister for different taxes; creating a single customer account where taxpayers can view their details in one place; and simplifying how tax liabilities are assessed and calculated.

It also argues that obligations and processes across different taxes should be as consistent and simple as possible, and should serve to simplify the tax system as a whole.

Commenting on the issue, John Barnett, Chair of the CIOT's Technical Policy and Oversight Committee, said: 'The UK's tax system is creaking at the seams and this thorough review of the administration framework is long overdue.

'Many of the problems with tax administration are to do with HMRC's processes, systems, communications and guidance. These are just as important as the statutory rules and structures. We believe significant progress is achievable by making improvements in these areas, including to HMRC's service standards, to help reduce burdens on taxpayers and build trust in the tax system.'

The government must make immediate changes to the current self-isolation policy as businesses face 'crippling staff shortages', according to the Confederation of British Industry (CBI).

Over 500,000 people were notified by the NHS test-and-trace app last week.

The CBI has called for the government not to wait until 16 August but immediately allow double-jabbed individuals to avoid self-isolating for ten days.

It also called for clearer communication from the government around future country categorisation changes to help support the international travel sector, together with ramping up efforts for 100% full adult vaccination.

Lord Karan Bilimoria, President of the CBI, said: 'With restrictions being lifted and cases rapidly increasing, we urgently need a surefooted approach from government, creating confidence to secure the recovery.

'This starts by immediately ending the self-isolation period of ten days for people who are double-jabbed and providing a route out of isolation for those not yet fully vaccinated through daily lateral flow tests. Against the backdrop of crippling staff shortages, speed is of the essence.'

More than 40% of UK employers are planning to increase investment in training compared with pre-COVID levels, according to the 2021 Confederation of British Industry (CBI)/Birkbeck, University of London Education and Skills Survey.

The survey, which was completed by 252 respondents, shows how businesses are responding to accelerating changes to work.

It showed that over the next three to five years companies expect to have greater need for people with skills at all levels.

Employers most expect the need for other workplace skills unattached to qualifications – such as communication and teamwork - to increase. However, respondents are the least confident about meeting these skills needs.

The CBI Education & Skills Survey is published against a backdrop of many companies struggling to fill vacancies, as the economy reopens rapidly from the pandemic.

Matthew Fell, CBI Chief UK Policy Director, said: 'Firms are currently facing a perfect storm of staff shortages worsened by rising levels of self-isolation. They're taking immediate steps to resolve this, investing in skills and automation and strengthening inclusion. But the Government needs to play its part too on skills and immigration.

'To support individuals to gain new skills, the government should make flexible, bitesize training more accessible before the Lifelong Learning Entitlement is introduced in 2025.

'Building closer local links between employers and education providers will also be key to supporting every UK region and nation to thrive and ensuring our economy can fire on all cylinders.'

There are more job vacancies now than there were before the pandemic, according to the Official for National Statistics (ONS).

ONS figures also show that unemployment is now falling after a year of job losses.

The number of open jobs between April to June 2021 was 77,500 above its pre-pandemic level in January to March 2020, says the ONS.

There were 862,000 job vacancies between April and June, the highest figure in 15 months.

Meanwhile, unemployment fell slightly between March and May 2021, according to official figures, with an increase in both the employment and the number of hours worked.

However, the UK's unemployment rate is currently 4.8%, still 1% higher than before the pandemic began, the ONS added.

Matthew Percival, Director for People and Skills at the Confederation of British Industry (CBI), said: 'Vacancies exceeding pre-COVID levels is a further sign of demand returning and employers creating jobs.

'Yet businesses' ability to meet this demand, and support the recovery, is being challenged by staff shortages. As COVID cases rise, firms are facing the double difficulty of hiring workers and more employees self-isolating.'

Retail sales bounced during the spring with the quarter from April to June showing record growth, according to the latest figures from the British Retail Consortium (BRC).

Sales in the second quarter of 2021 rose 28.4% from a year previously and were up 10.4% from 2019.

June's sunny weather and the Euro 2020 football tournament helped to boost trade, the BRC said.

But the BRC warned that many retailers still faced 'strong headwinds' as the UK economy recovers from the pandemic.

In June, fashion and footwear did well, while the start of the Euro 2020 football championship provided a boost for TVs, snack food and beer.

BRC Chief Executive Helen Dickinson said: 'The second quarter of 2021 saw exceptional growth as the gradual unlocking of the UK economy encouraged a release of pent-up demand built up over previous lockdowns.

'In June, while growth in food sales began to slow, non-food sales were bolstered by growing consumer confidence and the continued unleashing of consumer demand.

'With many people taking staycations, or cheaper UK-based holidays, many have found they have a little extra to spend at the shops, with strong growth in-store in June.'