Wednesday's 2016 budget is the talking point this week for most UK citizens. Whilst I try to keep my political views out of my business, I thought it would be good to talk about what affects the budget had on photographers, especially those who are self employed. The stakes were high in this week's budget, George Osborne was well aware that he needs to keep small businesses on his side ahead of the European Referendum, and did he achieve that, I'll let you decide.
Tax allowances & NI
If you're a self employed photographer you can wave goodbye to paying class 2 national insurance as the chancellor is abolishing this in 2018. When it comes to tax, the income tax threshold is set to rise to £11,500 in 2017 and the threshold for higher tax rates is set to be raised from £43,000 to £45,000 in 2018.
Osborne spoke about creating "a level playing field for businesses" he aims to do this by announcing a new £15,000 threshold for small businesses, approximately 600,000 small firms will pay no business rates at all. Is that good news for small photography businesses?
'From April 2017, small businesses that occupy property with a rateable value of £12,000 or less will pay no business rates.
Currently, this 100% relief is available if you’re a business that occupies a property (e.g. a shop or office) with a value of £6,000 or less.
There will be a tapered rate of relief on properties worth up to £15,000. This means that 600,000 businesses will pay no rates.' - www.gov.co.uk
As a small photography business in the UK, I can openly say I felt cheated when big firms such as Google & Facebook were manipulating the system to avoid paying tax without any repercussions. George Osborne says new measures will stop these big firms from cheating the system, if this happens we're yet to see, but for small businesses it's a welcome announcement.
Capital Gains Tax
If you plan to sell shares or equity in your photography business, you may want to know that the capital gains tax has been cut from 28% to 20%, with the basic rate also falling from 18% to 10%.
The Northern Powerhouse
If you watched me live on Good Morning Britain on Wednesday morning (see below) you will know my own political views when it comes to the chancellor's plans for the Northern Powerhouse. If you live and work as a photographer in the north of England you will know our transport links are seriously behind when you compare it to the south of England. Osborne is set to give the go ahead for the HS3 line between Leeds & Manchester, the journey time will be cut from 50 minutes to 30 minutes. He had also announced an extra £161million to expand the M62 motorway into a four-lane motorway, as well as improvements to the A69 & A66.
There was some horrific scenes across the North of England with the recent floods, I'm sure many photographers and the wedding industry were affected. George Osborne is set to add an additional £700m to the flood defences, let's hope the government acts quick on putting these promises in place.
Fuel & Transport
Most photographers will have welcomed the recent reduction in fuel prices across the United Kingdom, the nature of our jobs requires many photographers to travel the length of the country so fuel duty was high on the agenda. Thankfully the chancellor froze the duty on fuel and also reduced toll fees by 50% across the Severn River.
Stamp Duty For Commercial Property
If you're looking to buy a premises for you photography studio or shop, since the budget on Wednesday, you won't pay any stamp duty on property purchases under £150,000. Osborne says 90% of businesses will pay the same stamp duty or less due to this change.
'The way stamp duty on freehold commercial property and leasehold premium transactions is calculated will change. Currently, these rates apply to the whole transaction value. From 17 March 2016 the rates will apply to the value of the property over each tax band.
The new rates and tax bands will be 0% for the portion of the transaction value up to £150,000; 2% between £150,001 and £250,000, and 5% above £250,000.
Buyers of commercial property worth up to £1.05 million will pay less in stamp duty.
Stamp duty rates for leasehold rent transactions will also change, with a new 2% stamp duty rate on leases with a net present value over £5 million.' www.gov.co.uk
Tax Allowances for the Sharing Economy
Photographers will welcome the two new tax free allowances. If you make up to £1000 from occasional jobs, for example sharing photographic equipment, providing a lift share or selling goods you have made, you will no longer need to pay tax on that income.
If you use property as a way of income, for example renting out your photography studio to other photographers and providing storage for others, the first £1000 will be tax free.
The Photographers Reaction
Since Wednesday there seems to be a mainly positive reaction from photographers and small business owners, particularly with regards to the changes to business rates. It's no easy task starting a photography business in the United Kingdom so it's good to see the government are helping those small businesses. The 2016 Budget isn't as welcoming to other people in our society, tax cuts are all well and good for people who are more fortunate but I really hope the chancellor addresses the serious issues of disability cuts, the increasing rise of homeless people in the UK and much needed improvements to our education systems.
Link to my appearance on Good Morning Britain: WATCH HERE