What do we like?

• Confirmation of the introduction of SEIS (Seed EIS) – already prompting large interest amongst our clients
• EIS investment limit raised to £1m per person
• Tax breaks for the TV, Animation and Games sectors from April 2013 – detailed legislation expected later this year
• The “Patent Box” for intellectual property, taxing profits at just 10% from April 2013
• The increase in R & D tax credits
• The reduction in corporation tax to 24%
• The reduction in higher rate income tax to 45% from April 2013
• 37p on a packet of cigarettes

And what don’t we like?

• The increase in SDLT for “mansions”
• EIS limit now proposed to be £5m rather than the £10m announced last year – arguments with the EU clearly continuing
• CGT on UK property gains by “non natural persons”

To read our full notes on the Budget please click here

In the past, anyone submitting their tax return after the January 31 deadline faced a straightforward £100 fine. If there was tax due, you also had to pay interest on the outstanding tax.

This year however the game has changed. The £100 fine still stands but HMRC have added a series of further deadlines and penalties for people who file late.

If returns are not submitted by 30 April 2012, an automatic penalty of £10 per day will be charged up to a maximum of £900 in addition to the original £100.

A further £300 (or 5% of outstanding tax) will then be charged if the return has not been submitted by 31 July i.e. if you’re six months late.

If you’re a real sinner and your tax return is 12 months late, another £300 (or 5% of outstanding tax) will be added to the bill.

Clearly, the new measures have been introduced to help the Government pay off its mountain of debt. Don’t let them get their hands on your money – get busy now.

As ever our usual advice still stands – make sure you get your tax affairs in order in good time so your return can be submitted nice and early, avoiding the need for panic – and nasty fines!!

We at Nyman Libson Paul are heavily involved with EIS and have seen the scheme’s popularity grow in recent years, particularly since the increase in Income Tax relief to 30% in 2011. Whilst we are still waiting for EU State Aid approval for the annual raise limit to go up to £10 million, some other good news has come along in the meantime.

Film Industry fears over new qualifying rules were eased, when previous proposals were dropped in favour of anti-avoidance measures aimed at circular schemes and pre-funded businesses. Meanwhile, easing of rules for connected persons means that investors may also make loans to EIS companies without it impacting on the number of shares they may hold. This offers more funding options and should prove attractive to investors and companies alike.

We now have the details of SEIS (Seed EIS). Offering 50% tax relief and a 2012-13 CGT holiday on investment, it applies so that a company can raise up to £150,000 in total if it has up to 25 employees and assets up to £200,000 at the time of issue. It must be a new trade and directors may invest. At least £75% of the SEIS money must be used before any EIS money can be raised. If SEIS is used in the same year as EIS it will also restrict the amount raised under EIS.

It just gets better…

Describe a typical day

Well today I have rushed from of a meeting with some film producers looking to raise money for their project, to this blog interview. This afternoon I have two meetings with West End solicitors representing some other people who are making films and then this evening I am off to a launch party for an EIS share offer document to raise money for a film called Northern Soul. Tomorrow is similar, I have meetings in the West End to discuss EIS fund raising for film development and will end up at an evening reception to celebrate the green lighting of a film following an EIS fund raise we worked on. I do actually sit at my desk alot too, honestly!

Music is close to your heart I believe, tell me more

I spent many years working in the club promotion business and love music so tonight it will be good to shuffle around the dance floor to some of my favourite tunes (and enjoy a couple of beers) after having worked hard on the Northern Soul offer documents. As they say, it’s a tough job but someone has got to do it! It’s really nice to be able to go to events and dance after years of being a club promoter where I’d spend the evening rushing around making sure everything was running smoothly.

How has your previous working life helped you in your role at NLP?

The creative and organisational skills and the knowledge that I gained in the entertainment industry have been an invaluable insight in my role as an entertainment accountant. My experiences in performing as a DJ, promoting, creating concepts and stage managing gives me a certain empathy with entertainment industry clients.

How has your job changed most recently?

My life has been transformed over the last few years by the increase in the film industry’s use of EIS to raise money for film finance which coupled with our expertise in film tax credits is making us a popular one stop shop. This has made me very busy but when you are busy doing something that is fun and interesting it is a job to die for.