From The Bookseller:
Recent changes to tax rules pose a “triple whammy” blow to writers, the Society of Authors (SoA) has warned.
The SoA’s chief executive Nicola Solomon has told The Bookseller that proposed changes to the VAT flat rate scheme, announced in the last Autumn Statement, will “impact adversely on authors”, while the forthcoming abolition of Class 2 National Insurance in 2018 is “a bombshell for authors on low incomes”. A third blow in a trio of tax changes is the prospect that writers will have to submit quarterly tax updates online as part of a bid to digitise the UK’s tax system. This continues to be “very concerning”, Solomon said, adding that the organisation intends to lobby for changes to exempt sole traders, or for systems to be provided that take into account its members’ “unique working practices”, on all counts.
“We are concerned that there are changes to tax which will create a triple whammy for authors, particularly authors on lower incomes,” Solomon said. “Authors’ incomes are declining and they simply cannot afford to pay more tax and National Insurance or to spend money on expensive accountants, software or updated computers,” Solomon said. “Furthermore, the pressures on authors’ time have also become greater as they are asked to self-promote by appearances and social media. They do not have the time to input quarterly accounts or to get to grips with so many new systems.”
The government’s Flat Rate Scheme is a means of simplifying tax calculations for traders. However, in April 2017, a higher rate increasing from 12% to 16.5% will apply to “limited cost traders”, i.e labour-intensive businesses, which could include authors, when the new rules come into force.
. . . .
The MTD proposals have sparked fears it will be those already on meagre incomes who are forced to pick up the cost of the changes, both in monetary terms and in time, potentially distracting from the business of writing. One SoA member, a full-time author, contributed anonymously to the SoA website saying it would be “unduly time-consuming, with no discernable benefit for HMRC” and “reduce my ability to concentrate on my writing”. Another member, Sheila Norton, said: “The thought of doing anything tax-related (however little it involves) four times a year instead of once still makes my heart race”.
Another, Leslie Wilson, said: “Many authors don’t earn what anyone could call significant amounts, and to have to fill in quarterly updates – which would indeed interfere with them working for their paltry earnings – is rather like adding insult to injury.”
. . . .
According to trade union The Writers’ Guild of Great Britain (WGGB), these MTD reforms will “significantly affect” authors who are self-employed, because they will need to install new, approved software and receive support and training – all at a cost. It estimates that quarterly submissions could escalate accountancy costs by as much as 400%.
Link to the rest at The Bookseller
I have to complete quarterly tax statements already. Yes, it’s a pain. No, it doesn’t interfere with your ability to write. I do my own, so there is not extra expense except some lost time.
I’m puzzled by all the complaining about how much of a burden quarterly updates are going to be. As a small business owner you should be doing some work on your taxes continuously. Just throwing everything in a shoe box and dealing with it at the end of the year makes things a lot more difficult and prone to error. Quarterly submissions increasing accountancy costs by 400% seems simplistic. Because, again, if accountancy is being done on an ongoing basis rather than in one lump, it’s easier in the end.
And the complaint about having to use approved software and receive training on it… How special are these snowflakes?
I’m puzzled you’re puzzled. The government wants enough already, and more updates take more time.
Snowflake to you.
“The SoA’s chief executive Nicola Solomon has told The Bookseller that proposed changes to the VAT flat rate scheme, announced in the last Autumn Statement, will “impact adversely on authors”, while the forthcoming abolition of Class 2 National Insurance in 2018 is “a bombshell for authors on low incomes”. A third blow in a trio of tax changes is the prospect that writers will have to submit quarterly tax updates online as part of a bid to digitise the UK’s tax system.”
Color me confused, but I thought VAT on ebooks was being lowered and the second would affect small businesses and the third all businesses?
(So I’d expect that more than just ‘authors’ are going to have to put up with this.)