  
Other Measures Announced
Profits Averaging for Authors and Creative Artists
The government has published draft legislation to replace the income spreading rules for authors and creative artists with a profits averaging system. The revised system will enable authors and creative artists to average their profits over two or more consecutive years of assessment. The first years that will be available for averaging will be 2000/01 and 2001/02. An averaging claim can be made if the profits of the lower year are less than 75% of the profits of the higher year. To qualify for the new system the profits must be taxable under schedule D case I or II and also derived from a trade, profession or vocation whose profits are mainly earned from creative activities.
| Tax tip |
| If your employer reimburses your business mileage at less than the FPCS rate, you can claim tax relief for the shortfall. |
Tax Relief for Cleaning up Contaminated Land
It is proposed that accelerated tax credits will be given in respect of costs incurred by companies in cleaning up contaminated land sites. The enhanced deduction will be for 150% of the expenditure and will apply to costs incurred from the date of Royal Assent of the Finance Act. This is another measure to encourage effective land use and urban regeneration.
Small Business - Alignment of Tax and Accounting Profits
Consultation is to be undertaken to consider aligning profits for tax purposes for small businesses broadly in line with those reported in their accounts.
Extension of Film Tax Relief
The 100% tax relief on completion of the production and acquisition costs of "British Qualifying" films budgeted at under £15 million was first introduced in 1997 and was originally to run for the three year period ending 1 July 2000 but this was further extended to 1 July 2002. Today the Chancellor announced that the relief would be extended by another 3 years to 1 July 2005. This represents a significant boost to the British film industry no doubt inspired by recent successes in the industry.
| Tax trap |
| Failure to file a Tax Return can result in large surcharges, penalties and interest. Remember if you have tax to pay, the onus is on the taxpayer to ensure a Return is submitted. |
Stamp Duty Reserve Tax (SDRT) and Individual Pension Accounts (IPAs)
Draft legislation has been published to implement the SDRT exemption for IPAs. The exemption will allow pension savers who hold units in unit trusts or shares in open-ended investment companies within an IPA to adjust their investments in that framework without incurring a liability to SDRT.
Works Buses
Employees can travel from home to work on an employer provided bus with at least twelve passenger seats without incurring a taxable benefit. This exemption is being extended to minibuses with nine to eleven passenger seats. For safety reasons, this extended tax exemption will only apply to vehicles originally constructed to carry that number of seats.
Life Insurance: Transfers of Shares in Life Policies and Information Duties of Insurers
Legislation will be introduced in the 2001 Finance Bill to simplify and clarify the tax treatment of transfers of shares in life insurance products. The new rules on transfers will have effect for policy years beginning on or after 6 April 2001. New measures will also be introduced to require insurance companies to provide details of life policy gains to their policyholders. This will make it easier for policyholders with a taxable gain to complete their Self Assessment income tax returns.
and finally.....
Don't forget to check the tax calendar for a selection of filing, issuing, and payments deadlines. Remember, under self-assessment late payment or filing can cost you dearly in penalties, surcharges and interest.
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