Averaging for creators of literary or artistic works

I am a writer and in previous years have done my SA tax return online. However, I can't see any option on the self employed pages for this year's return to take advantage of authors averaging, having sold my first novel last year. Is this possible to set up online? Or will I have to send a paper return?

Hi,

You need to complete the full self employment page, you will probably need to select the turnover over £86,000 for this. For this to appear and look for the box.   

Averaging adjustment, only for farmers, market gardeners and creators of literary or artistic works.

Thank you.

Many thanks for your reply. I am not currently subject to VAT. However, having done as you suggest above it asks for more detailed expenses on the basis I am subject to VAT (due to selecting the turnover being over £86k, even though when I input my turnover it is around £25k). I just want to check, in the final calculation of my self employment income, HMRC/Self-Assessment will not subject me to VAT will it?

Hi,

Self Assessment does not calculate VAT. It is only responsible for calculating Income Tax, Capital Gains Tax, student loan repayment and class 2 and class 4 National Insurance contributions where appropriate.

Thank you.

Thank you. I just want to be sure that selecting the turnover over 86000 to do the averaging won’t result in HMRC chasing me for VAT in some way even though I’m not liable for it?

Hi
No.  There is nothing to worry about in that respect.  The self assessment and partnership pages are divided into the short version and the full version.  There are some circumstances that require the completion of the full version, as the required boxes are not found on the short version.

Many thanks for your help with this. I've followed your advice and successfully setting up the averaging on my 2023-4 SA return. However, I'm getting a red-warning alert on the 'Other tax adjustments' page of my return. I think this is due to my having a loss, of around 4000, from the previous year that I'm bringing forward to offset against profit this year. Presumably that loss is wiped out by the retrospective averaging of my profit to the previous year. Is that the issue? I want to be able to take account of the loss in either last year's (adjusted) averaged profit or this year's. What do I need to do?

Do I also need to submit anything or amend my 2022/3 return to take account of the change in profit as a result of averaging? Or will my tax account reflect that automatically?

Hi,

Please refer to the following guidance:

HS224 Farmers and market gardeners (2024)

HS234 Averaging for creators of literary or artistic works (2024)

You will need to work out the averaging figure, having included the year of the loss that falls within the averaging period, examples are given. Further guidance can be seen here:

BIM84000 - Averaging

Thank you.