Following consultation about the reform of the taxation of
intellectual property in 1999 and 2000, the backwards and forwards
spreading rules for authors, sculptors, etc (see
BIM50735) were repealed by FA01/S71 for
income arising after 5 April 2001.
They were replaced by a new relief based on farmers' averaging ( BIM73101 onwards). The main features of the new rules are explained in Help sheet IR234 to the self-employment pages of the SA tax return. If you are making or examining a claim please read the Help sheet first. You can see a copy in the SA area of the HMRC website or ask the orderline (telephone 08459 000 404) to send you one.
The new rules apply to the same types of profession as the old spreading rules but they are simpler and more people will be able to claim. By contrast with the previous spreading rules:
The legislation is in ICTA88/S95A and ICTA88/SCH4A. The new
rules are written in the style used by the Tax Law Rewrite Project
(TLRP) in their rewrite of the rules on farmers’ averaging
(ICTA88/S96). The rules on farmers' averaging were exposed for
comment in Chapter 3.13 of the Tax Law Rewrite Exposure Draft No
10, published in May 2000. The draft clauses were on pages 95 to 98
of Volume 2 and the commentary on pages 100 to 101 of Volume 1. You
can see a copy in the Publications area of the HMRC website. The
Help sheet and the legislation will enable you to deal with most
aspects of the new rules. Some particular aspects are explained at
These rules and the ones for farmers’ averaging are merged in ITTOIA. If you need help beyond that in the legislation and Help sheet IR234 please refer to the appropriate section of the guidance on farmers’ averaging. There is a list at BIM73060.