Taxes and Legal Stuff

h.r.ford

h.r.ford

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I'm hoping some of you can steer me in the correct direction. Do most of you charge VAT and do all the propper stuff or is it all very much Under the Table?? Do you set yourself up as a ltd. company or not? And is there such thing as photographers insurance? I'm familiar with large business administration and law but never really had anything to do with UK small business stuff so I'm at a loss.

Thanks in advance.
 
h.r.ford said:
......or is it all very much Under the Table??
Click to expand...

I'm sure the fine upstanding people on here would never resort to such underhand practices but if by chance one did slip in I doubt the scallywag would ever admit to such wrongdoing or nefarious behaviour. :)

With regard to VAT you don't have to register for that unless you hit a certain threshold which I believe is around £50k per year.

There are various insurance companies around, thanks for reminding me as I have to sort out mine. :thumbs:
 
VAT - Not at this stage. You can register for VAT at any stage but you're not obliged to do so until turnover exceeds £61000.

Ltd Co - Not at this stage, just advised Revenue and Customs that I'm "trading as" in addition to normal employments. Tax return just includes additional photographic income along with salary etc. Best speaking to an accountant though, especially if you're in the 40% bracket as there might be a case for setting up a Ltd Co. I'd doubt it initially though.

Insurance - Yes, Equipment and Public Liability as well. If I ever decide to go down the wedding route I'll pick up professional indemnity as well.
 
OH the threshold is much higher than it is in NY state (therefore Under the table isnt' necessary). I'm not over the 40% threshold but it is close enough that I need to keep an eye on those things. As for Insurance to you just give any old agency a call or are there specific ones? Can you just hop on uswitch or is a bit more complicated than that?

I'm just a wealth of questions today.
Thanks again!
 
Get yourself a good accountant!
 
Right ok.

VAT

You can register for VAT any time you like. If you have a VATable turnover of more than £60k (I think) they you are required to register for VAT.

The benefit of registering for VAT when you dont have to is that you can claim the VAT back on all of your inputs (i.e. your expenses). The downside is that you have to charge VAT on all of your outputs (i.e. your sales). For customers who are not VAT registered, this means a price increase of 17.5% (as they cannot claim it back). If your customers are VAT registered then they will not suffer at all. Therefore the key thing is to determine whtether your customers are VAT registered or not. The other factor to take into account is how many of your expenses have VAT on them.

National Insurance

As soon as you start earning money from a self employed business you are obliged to let HMR&C (Her Majesty's Revenue & Customs) know that you are doing so. You will have to pay Class 2 NIC (£2.10 week) - usally set up by direct debit. You will also be liable for Class 4 NIC. However, if you are paying sufficient Class 1 NICs with your normal employment, then you can apply for an exemption from the majority (I think) of Class 4. (Class 4 is based on your earnings, in the same way as Class 1).

Income Tax

AT the end of the tax year (to 5 April) following when you notify HMR&C of your new status they will send you a tax return. This si nothing to be scared of!

It has to be submitted by the following 31 January. However, if you would like HMR&C to calculate the actual tax due, the return has to be submitted by 31 September.

The return is generally self-explanatory. In fact I have heard it said that it is easier to follow if you know nothing about income tax!

You can pay a local accountant (probably around £300, maybe less) to compltete the return for you.

I hope this helps somewhat. :)
 
My turnover is more like £50 than £50,000. Thought about registering the company officially and stuff so I could get business rates to lease a new car but it's too much like hard work and I don't want to spend more time on paperwork than photography already.
 
Wow Joe T thanks! Luckily I have a few Accountant friends one of them being a tax expert who I can hopefully convince they need to help me. Of course I am putting the cart before the horse as I haven't been paid once yet! But tomorrow is supposed to be my first paying gig. We'll see how it goes. Thanks again!
 
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