Wednesday, 30 March 2011

Budget implications for self-employed creatives

Fred has done a summary of implications for self-employed creatives of the recent budget: Creative industries: As part of the Budget, chancellor George Osborne listed the creative and digital industry as one of those, along with life sciences, that it planned to protect in order to encourage growth. Intellectual property: The Chancellor said "In digital and creative industries we will improve the intellectual property regime," which looks like a clear indication that more is going to done to protect IP. Tax: The basic personal allowance will rise to £8,105 from April 2012. VAT: The threshold for compulsory registration for VAT was raised from £70,000 to £73,000 annual turnover. Travel: Fuel duty cut by 1p a litre from 23rd March, good news for anyone who uses their car on business. The mileage rate approved by HM Revenue, which applies to sole traders and partnerships using the mileage method, will be increased from 6th April 2011. The rate for the first 10,000 miles will go up from 40p a mile to 45p a mile. Above 10,000 miles it remains at 25p. Business rates: Business rate relief holiday for small firms extended for another year from 1 October 2011. Apprenticeships and work placements: £180 million package for 50,000 additional apprenticeships, and an additional 80,000 work placements for young people. Tax rules: A large package of tax rues will be radically simplified or abolished. IR35 rules (the Revenue’s directive on what constitutes a ‘genuine’ freelance) will not be abolished, but HMRC plans to try to simplify by improving administration. Tax simplification: There will be consultation on combining income tax and National Insurance. That would reduce administration for small businesses, but don’t hold your breath, there is no timescale set for when this might happen, and it will be technically difficult to achieve. Regulations: A moratorium exempting micro-businesses and start-ups with fewer than 10 staff from new domestic regulations for three years from 1 April 2011. New EU regulations will still apply. Health and Safety regulation to be reviewed and simplified. Startups: A new initiative for “Start-up Britain” to help people starting a business will be launched shortly. Film tax: Film tax relief (100% for small budget, 80% for large budget productions) will be re-notified to the EU, to extend approval beyond 2012.

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