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Monthly Archives: August 2013

Creative industry tax relief spelt out by government

A recent development of interest to many of those using accountants for freelancers like those of Freelancer Accounting (http://www.freelanceraccounting.com) will be the introduction of new small print by the government concerning companies’ eligibility for ‘creative industry tax relief’. Creative industry tax reliefs are Corporation Tax reliefs enabling larger deductions or even payable tax credits to be claimed by qualifying companies when they calculate their taxable profits.

The way these reliefs work is that the amount of allowable expenditure is increased. In the event of the eligible client of a PCG accountant making a loss, there may be the option of ‘surrendering’ that loss, converting some or all of it into a payable tax credit. The introduction of Film Tax Relief in 2007 was followed by that of two further reliefs, Animation Tax Relief and High-end Television Tax Relief, in April 2013. Subject to state aid approval, a fourth relief for Video Games Development is also set to be introduced.

The rules concern eligibility for these tax breaks are therefore relatively clear just from their names, but should a contractor accountancy client be in any doubt about their potential qualification for a tax deduction or even a potential payable tax credit on their profits, they can email their queries to a unit inside HM Revenue & Customs that has special responsibility for the reliefs. In order to qualify for creative industry tax reliefs, companies should be both liable to Corporation Tax and directly involved in producing and developing certain films, video games, animation programmes or ‘high-end’ television programmes.

There are special tax rules that apply to film production companies producing films, irrespective of whether the films are intended to be released in cinemas, as well as television production companies producing relevant high-end television programmes or animation. Although it is possible for companies to opt out of these rules, doing so will invalidate their eligibility for Creative’s Tax Relief. There are also qualifying conditions that apply to the reliefs.

To qualify for the reliefs, those creative companies making use of accountants in London will need to subject their films, television programmes, video games or animations to a ‘cultural test’. Passing this test will entitle them to a formal certificate stating that the game, programme or production is ‘British’. Alternatively, qualification is possible through an internationally agreed co-production treaty. In all cases, one cannot qualify without formal certification.

Administration of the certification and qualification process is by the British Film Institute (BFI) on the Department for Culture Media and Sport’s behalf. For incomplete work, an interim certificate can be issued, while a final certificate can be issued if production is finished.

More guidance and eligibility information in relation to creative industry tax reliefs can be viewed on the HMRC website. It may make intriguing reading for many of the clients of our accountancy services, who are free to contact Freelancer Accounting (http://www.freelanceraccounting.com) at any time for the most up-to-date advice on their tax and accounting affairs.

You may be a happy freelancer, but do you miss the office?

For many of the people who have gone freelance and engaged the services of Freelancer Accounting’s (http://www.freelanceraccounting.com) accountants for freelancers, there can be few more attractive prospects than being away from the traditional office, with all of its ‘office politics’ and prohibitive overheads. For others, though, there can be a more lingering nostalgia for office life – indeed, almost half of all freelancers claimed to miss it, according to one new survey.

That survey, by Rev.com, discovered that the social aspects of office working life were missed by 46 per cent of freelancers, while an additional 5 per cent hankered for the presence of a boss. But there was also plenty of evidence suggesting that freelancers like those making use of our accountants in Reading missed little about the office – or nothing at all, in the case of 28 per cent of respondents. The office was least likely to be missed by older workers, with 37 per cent of over-50s not able to identify a single reason to return. But this figure was only 19 per cent among freelancers under 30, suggesting that more than 4 in 5 freelancers would be open to returning to an office with the right incentives and circumstances in place.

But 95 per cent of respondents had experienced working in a traditional office prior to making the decision to go freelance, with the wish to escape it being a major motivation for doing so in the first place – irrespective of any regret in hindsight. 35 per cent of those polled could barely wait to be their own boss, while for 17 per cent, the chance to spend more time with family was a priority. Such workers believed that they would be enabled to do this by the freedom to manage their own work schedule. The simple wish to work from home, as opposed to a more formal office setting, was a justification for an additional 11 per cent of freelancers, including – undoubtedly – many of those using our accountants in Richmond.

Recent years have been characterised by a greater tendency for workers to freelance, thanks to such factors as greater economic uncertainty and technology that increasingly lends itself to mobile working. Such a trend has, in turn, increased the need for specialist accountancy services. But the survey’s findings do suggest that other ways abound in which freelancers can assuage those lingering yearnings for the office – such as making use of shared office space in which they can continue to foster social relationships.

By combining co-working in shared offices with the accounting services in London of Freelancer Accounting (http://www.freelanceraccounting.com), freelancing professionals can make their finances go so much further, to the end of making affordable the most suitable working environment.