For Creatives, Creative Freelancers, SMEs in the Creative Industries and everyone in between, staying on top of your statutory responsibilities – as well as being in the loop regarding Tax Credits & Funding – is crucial to survival. April 2017 heralds another new tax year, so let’s make some tax year resolutions. “>WardWilliams Creative will always strive to keep you up to date with relevant tax news and will work with you to achieve the best possible outcome. “>There are things you can do in the meantime:
Top Tax Tips for the Creative Industry
Get Organised
As we head towards Making Tax Digital which should see an end to the “shock tax bill” at the end of the financial year. However, it’s worth getting in the habit of making regular records. Make copies, file regularly, get into the habit of scanning receipts as you go. This is where tech can help…
Use tech to your advantage
We are going to follow this with a more detailed blog about helpful accounting software, but these are useful to get started:
- ClearBooks : Perfect if you run a small business or you’re a sole trader.
- FreshBooks: Makes your accounting tasks easy, fast and secure. Send invoices, track time and capture expenses in minutes.
- Kashflow: Online bookkeeping software for small businesses – track sales and expenses.
Don’t bury your head
The worst thing you can do is ignore your tax and accounting responsibilities. We are here to help and the sooner you come to us the better. Don’t forget we offer discounts and incentives for early returns. It’s not as painful as you think…honest.
Have a review with a WardWilliams Creative Expert
There are a lot of changes to tax thresholds, allowances and rules. The change in National Insurance Contributions for the self-employed has been scrapped but there are still plenty of changes to be aware of. To make sure you are getting the best out of your business and complying with your statutory responsibilities, get in touch with Erin and the team.
New Tax Limits, Rates & Rules that will affect the Creative Industries
The new measures announced in the last spring budget are now in place. We’ve highlighted the main areas that will affect our Creative clients. If you have any questions get in touch today.
VAT thresholds increase
VAT registration has now increased from £83,000 to £85,000. If you’re not yet registered you won’t have to until your VATable sales have reached the new threshold or within the next 30 days. If your VATable sales are under £83,000 for the next year then you can deregister for VAT.
Dividend Allowance
Dividend allowance has been reduced. Limited company shareholders can currently receive up to £5,000 in dividend income tax-free. This will fall to £2,000 from April 2018. So directors/shareholders of a limited company, who take a low salary and make the rest up with dividends, will pay more tax.
New ‘limited cost trader’ VAT rate
If you currently use the VAT flat rate scheme to work out how much VAT to pay each quarter and buy very few goods in your business (specifically, you spend less than 2% of your sales on goods, not services, in an accounting period, or less than £1,000 a year on certain goods) then you may find you have to use the new ‘limited cost trader’ rate. [greybg]
Corporation Tax Reduction
Corporation Tax has now reduced from 20% to 19% for financial year 2017/18. This means that Britain will has the lowest Corporation Tax rate of the world’s 20 biggest economies. There will be a further reduction in 2020 which will see the rate fall to 17% .
Income Tax rates raised
There are now changes to the Personal Allowance, the Basic Rate Limit and the Higher Rate Threshold for employees in England and Wales. Personal allowance: 11,000 to 11,500 Basic Rate Limit: 32,000 to 33,500 Higher Rate Threshold: 43,000 to 45,000 ***If you live in Scotland the Scottish government has set different tax bands from the rest of the UK.
