Creating growth – A blueprint for the creative industries is a recently released paper by the CBI aimed at focusing the UK coalition government on doing more to support UK creative and digital industries. Although I think this report provides a good overarching vision of what our UK creatives need from the government to flourish, in my view it is lacking on the specifics in terms of laying out a clearly defined roadmap for achievement.
Here are my initial thoughts on what’s there:
- Ensure regulation and competition is fit for purpose. Easy to say, harder to achieve given that our successive governments have added 1,000s of pages of tax legislation over the past 10 years (three Finance Acts will be issued this year alone!). The Office of Tax Simplification has recently been launched to help tackle the minefield of tax reliefs and bureaucracy encountered by small businesses and they will report their findings early next year. Don’t hold your breath though in the short-medium term!
- Ensure the ability to derive value from intellectual property is a subject dear to my heart. In a world where the number one driver of value is increasingly intellectual property (IP) – something that we are darn good at creating in the UK – it is vital that we have a commercial, legal and tax framework that supports its protection and successful exploitation. I am not a lawyer so can’t comment on the UK legal ins-and-outs, however, from a UK taxation standpoint I spend much time advising companies on maximising the value derived and I can say that our tax regime is getting more supportive e.g. we have the popular R&D tax credit regime plus a review this Autumn on the taxation of intellectual property (including consultation on a likely lower rate of taxation on patent income) but there is much farther to go – a video games tax break for example?!
- Deliver a competitive framework. This mirrors the stated aim of George Osborne in his inaugural Budget speech to make the UK tax regime the most competitive in the G20. The phased reduction in the main UK rate of corporation tax from 28% today to 24% by 2015 is encouraging. Note that small companies (broadly those stand-alone companies with taxable profits less than £300,000 – which will cover most UK creative companies) will pay tax at only 20% from next April (from 21% today). However, it is the PAYE, VAT and the myriad of other ongoing compliance and year end forms that add to the red-tape for small businesses. There is also the vast array of available tax reliefs to claim which is great – but only if your accountant or business advisor tells you about them! :)
What are your thoughts on this report? What does this mean for creative and digital businesses in Manchester, Liverpool and the North West? Does this go far enough?
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