How Creative Businesses can Make the Most of their Tax Allowance

Happy New Year to all! You know what January means folks, it’s drawing near to the end of the financial year and its time to get serious about your creative business accounts.

We already know the creative industries are vital to the UK economy, having smashed it as the fastest growing UK sector, collectively responsible for generating £101.5 billion gross value added (GVA). That’s a greater economic contribution than the UK’s automotive, aerospace, life sciences and oil and gas industries combined.

via GIPHY

With that in mind, creative businesses can take advantage of tax allowances and relief that the government has specifically set aside. Take a look at what you can do to make the most of your tax allowance.

Now is a good time to get to grips with any tax changes, so you can maximise your tax efficiency for the outgoing tax year and get your business prepared for the new tax year.

Specialist Tax Relief

There are specialist allowances and relief for creative businesses and industries. There is more information on the government website as well as the WardWilliams Creative site.

Corporation tax relief specifically for creative industries:

• Film Tax Relief (FTR)
• Animation Tax Relief (ATR)
• High-end Television Tax Relief (HTR)
• Children’s Television Tax Relief (CTR)
• Video Games Tax Relief (VGTR)
• Theatre Tax Relief (TTR)
• Orchestra Tax Relief (OTR)
• Museums and Galleries Exhibition Tax Relief (MGETR)

We are available for advise if you think your business may be applicable, please get in touch for more details.

Dividends

Make sure you take company dividends before 5th April 2019

It is important dividends are issued and paid by your company before 5th April 2019 to be classed as a 2018/19 dividend in your personal Self Assessment with HMRC. This is important to ensure you are maximising your tax efficiency by utilising your tax free allowances and HMRC tax thresholds.

Payroll

[greybg]

[/greybg]

If you’re running payroll, even for a single employee, then you mustn’t forget to file your final Full Payment Submission. This is an HMRC Real Time Information (RTI) requirement and you could face a £100 fine for each month you delay if you don’t file your end of year Full Payroll Submission (FPS) by 5th April 2019.

You should record payroll runs for March to maximise your tax efficient directors salary, for the tax year 2018/19 we usually recommend a salary of up to £8,424, so check the amount you have been paid since 6th April 2018.

Purchase Assets

Capital allowances allow you to claim tax relief on assets you buy for your business. The value of these items can be offset against your company’s profits over time.

Pension Contributions

If you want to make pension contributions this year, you need to make sure these payments are received by your pension provider by 5th April 2019. You can make these through payroll or employer contributions, so you’ll need to ensure this is done in good time. You are able to contribute up to a maximum of £40,000 (gross) into your pension policy in 2018/19. This is subject to (a) your relevant earnings and (b) the tapered Annual Allowance rules. While you’re thinking of future investments, you may want to check if you could make any payments into an ISA or other tax efficient savings which also have limits on what you can pay in each tax year. Please speak to your pension and investment advisor for more information and bespoke advice.

Its not that Scary

Don’t bury your head in the sand, we are here to help, get in touch with any questions or queries regarding your end of year tax responsibilities.