Becoming self employed / pro photographer?

Moos3h

Moos3h

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James
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Hi all,

I'm lucky enough to have landed a regular contract for my photography. However, the (huge) company have said they don't want me on their payroll, rather I should invoice them as a supplier.

This means I will have to set up as a sole trader, so I've contacted the Inland Revenue for the appropriate forms.

Does anyone have any advice? Right now, I'm just squirrelling away 25% of what I get paid, to fund the inevitable tax bill. I won't have to pay National Insurance as the business won't be making over £4.7k a year.

It's not my sole job, so I will continue to pay tax and national insurance on my earnings from my main income.

Any advice greatfully appreciated!!

Cheers,
James
 
i have a job and set up a tiny business doing photos.

when i rang the tax office and spoke to someone they were so help they were nearly falling over themselves.

have you rung and spoke to anybody.

you have to choose one of your jobs as your main job and be taxed on that one [quite heavily] but you need to get an accountant to work it out for you.

they wont cost much as he will only want to see your books a couple times a year.

also an accountant will claim you tax back on things you dont think off like electric you use in your home phone calls laundry ect and he will tell you exactly how you stand regarding your other job
 
Moos3h said:
Hi all,

I'm lucky enough to have landed a regular contract for my photography. However, the (huge) company have said they don't want me on their payroll, rather I should invoice them as a supplier.

This means I will have to set up as a sole trader, so I've contacted the Inland Revenue for the appropriate forms.

Does anyone have any advice? Right now, I'm just squirrelling away 25% of what I get paid, to fund the inevitable tax bill. I won't have to pay National Insurance as the business won't be making over £4.7k a year.

It's not my sole job, so I will continue to pay tax and national insurance on my earnings from my main income.

Any advice greatfully appreciated!!

Cheers,
James
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James the 25% may be enough depends upon how much you earn at your other job and if your anywhere near the higher tax level.

Best advice is get an accountant he will sort everything out for you and tell you what he wants you to do during the year re books, receipts etc.
My Accountant is very good have been with him 7 years now, and they know what they are doing. Never been in position of working and being self employed. I have just been in the self employed category for the last 7 years. (bar 9 months when i was employed.) for that period i just imformed the tax office i was not working self employed.
 
Well in terms of employment, my current job will be my main one, by miles!

I don't expect to earn more than one or two thousand at most over a year from the self employed stuff, but have an average salary with my other job.

What I don't want to do is pay more tax than I have to on my main salary if I'm earning such a small amount from the togging.

Cheers,
James
 
an accountant will do amazing things with his creativness and sort you out.

book to see one if only for a chat
 
I am self employed, but pay national insurance. I dont however have to pay tax on the first 4.7k ish of my income. At least I think it is that way around.

I guess it gets very complicated with the two jobs. It all makes my head spin :(
 
yes that right you dont pay tax on the first 4700 you earn weather you are self employed or on a payroll.

so a good accountant will keep your earnings below that but youwould probably earn more he he

as you say it you are employed as well as self employed its more complicated but an accountant can do it all for you

you just have to save receipts and write everything down.

even down to the 30p it cost to park your car while on business
 
photomad said:
so a good accountant will keep your earnings below that but youwould probably earn more he he
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A good accountant will simply minimise your tax bill within the legislation available. He/she will not keep your earnings under the tax threshold if it means breaking the law.

If your employed and self employed your total earnings will be taken into account. Assuming you're already at 25% or 40% any additional earnings will, after legitimate deductions, be taxed at the appropriate rate. You'll already probably be using up your personal allowances through your employment.

Joe T's your man for this though, I think he's a chartered accountant.
 
Presumably your already paying national insurance and you've used up your personal tax allowance with your normal job, so that puts the extra private earnings (sole trading) on top of your normal wages, so yes, save 25% of the extra wages (as long as it doesn't put you in the higher tax bracket, in that case save 40% on the extra wages) ... you should be about right.

You'll simply have to fill in a tax return next year, for this year 2006-2007. ..It may be slightly too early for the tax office to send you this form... not sure, I have asked to early sometimes.
 
a good accountant will get you tax breaks on everything he can think of thus minmisins your tax bill.

a bad accountant will not be so on the ball and you may miss out on tax breaks

an accountant will not break the law but a good one knows how to bend it
 
jps yes i know he has spoke to someone regarding the correct forms but what i meant was speaking to someone in depth about what he earns now and what he may expect to earn on the self employed side.

a conversation is far better than just getting the form
 
photomad said:
a good accountant will get you tax breaks on everything he can think of thus minmisins your tax bill.
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That's right, but it's different to what you said originally.

photomad said:
yes that right you dont pay tax on the first 4700 you earn weather you are self employed or on a payroll.

so a good accountant will keep your earnings below that but youwould probably earn more he he
Click to expand...
 
As Dod suggests, the key is legtimate deductions. You would be writing off the value of your camera equipment each year (say 25% depreciation pa) which would be an expense off your gross profit ie help to reduce your taxable earnings. And well done to you. Must be quite exciting.
 
Your wise to put away 25% but you will also have to pay class 4 on self employed income which is 7% (i think). Also you should pay extra NI class 2 contributions on any selfemployed income, although I didn't when I had a full time job as well. If your gonna earn under the limit you need to apply for exemption. If you have an accountant they will guide you through.

Good Luck!
 
what i said amounts really to same thing.

minimising the tax bill as much as humanly possible thats the accountants job

thus minimising on paper what you tell the tax man you have earnt
 
my online business did a max of about 3k a year, last year i think it was something like 1.5k as i have a main job, I actually got money back and didnt pay a penny long as you fill out your return youll be fine , but just make a note of dates for next year as I didnt and now have to keep phoning up to try and get a copy of last yrs return oops! I think i remember filling in a small earnings exemption i think its called. not that helpful sorry lol
 
1st of all you will have to let your local tax office know the date that you start trading, you will also have to pay extra national insurance contributions.
It is my personal opinion that an accountant at this point would be well appointed. They will if they are any good save you more money than they cost.

As you are now in business your assets, camera, computer equipment, lenses, vehicle, telephone etc all have tax deductable advantages to greater or lesser degrees. What this means is that at the end of the financial year any money spent on such things and consumables like ink cartridges and paper are deducted from any taxable profits that you make. Equipment has a depreciation value as do vehicles. Some things you may consider whilst thinking of deductable monies (some of which you may only claim a percentage against are,
Camera and lenses
Computers and laptops
Software
Vehicles
Fuel
Car tax and insurance
Repairs
Telephone and mobile phone bills
Ink
Paper
Postage, envelopes packing
Insurance
Flights and accommodation (I take stock photos so am at work when on holiday!!!)
Food whilst on location
The list goes on, I would advise talking to an accountant about such matters as they will be able to give you much better advice on this than me, these are just some examples of what I claim myself.

Another very important thing to consider at this time is what to charge…..
You will have to take into consideration many of the above expenses when reaching this figure but it is vital that you get this right at the outset. If you charge £25.00 for 1 job then a week later the same client wants something similar and you charge £175.00 they are going to want to know why.
It is very easy when starting out to not charge enough because you are not established or do not have a big enough client base yet but this can come back and bite you on the ass as I have found out myself. If customers suck in their breath or say somebody else will do it for less then let them, Work out how much it will cost you to do a job and do include travel expenses, fuel, parking food if it is a long job etc, and then your time. Your time is not just for taking the photographs either, be realistic in how long the post processing will take and the cost of any cd/dvd’s and or contact prints requested.
 
Gary and others have covered most things. Just a couple of points - from an accounting point it makes it easier to start your books from the beginning of the financial year - even if your first invoice is now, you can back date it - so very useful if recently bought items, so you deduct them from tax bill.

The Inland Revenue (or what they call themselves) are really helpful in my experience - they had here in Liverpool day courses for start-up businesses and it was excellent. Their advice is, yes, claim things as 'tax deductable' but be reasonable - for example if you have a car, they are going to investigate you quicker if you say you use it 100% for business and 0% for private, or that a home based business uses it's broadband 100% for business!

As a sole-trader I use an Excel spreadsheet and do all the accounts myself - if you have a fairly good grasp on maths it's easy to do tax and VAT yourself - as long as you are organised with your invoices and receipts.

But as others say, charge a reasonable rate to clients and be prepared to have to call and chase up late and unpaid bills.
 
Hello,
This can be a tricky one, so I would definitely get professional advice or give HMRC a call. You may also have to pay class 4 national insurance depending what your earnings are. I hope that helps.
 
Robin Smith said:
Hello,
This can be a tricky one, so I would definitely get professional advice or give HMRC a call. You may also have to pay class 4 national insurance depending what your earnings are. I hope that helps.
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I think you'll find this thread died in 2007 Rob !!!

So, errr, you're a bit late lol

Dave
 
Probably came across it in a Google search and wanted to reply. I've done it myself to be honest.
 
However it is interesting to see how the figure at which tax starts has gone up quite a lot!
 
Pound Coin said:
However it is interesting to see how the figure at which tax starts has gone up quite a lot!
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I think the 4.7k was the NI threshold, that’s now just less than 6k.

A quick google saysthe personal tax allowance in 2007/08 was £5225
 
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Basic personal allowance recently has been £11,500- about to go up a bit.

I don't know what forms you're on about - don't you just need to fill in a tax return? Mainly we do it on-line these days, but an accountant'll deal with it if you ask.
 
droj said:
Basic personal allowance recently has been £11,500- about to go up a bit.

I don't know what forms you're on about - don't you just need to fill in a tax return? Mainly we do it on-line these days, but an accountant'll deal with it if you ask.
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There was no online option in 2007 ;)
 
Phil V said:
There was no online option in 2007 ;)
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Yes there was, Phil! I'm sure it started about 2002? But yes, I did fail to notice that I was speaking to an OP from 2007 who might be no longer with us ...?
 
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