BqarbaraL Posted January 9, 2014 Share Posted January 9, 2014 If I am ever lucky enough to sell a photo.. do alamy take tax from my earnings ... Link to comment Share on other sites More sharing options...
spacecadet Posted January 9, 2014 Share Posted January 9, 2014 Not in the UK, that's HMRC's job. You're responsible for your own tax return. Where are you? Link to comment Share on other sites More sharing options...
BqarbaraL Posted January 9, 2014 Author Share Posted January 9, 2014 UK... Link to comment Share on other sites More sharing options...
spacecadet Posted January 9, 2014 Share Posted January 9, 2014 You're self-employed, not Alamy's employee, so Alamy pay gross and you account for it as part of your income. Presumably you have already notified HMRC. Link to comment Share on other sites More sharing options...
AndyMelbourne Posted January 9, 2014 Share Posted January 9, 2014 As I have mentioned before in a recent post, it is worth contacting your local tax office and attend one of their self employed seminars. They are very informative and even friendly. They do 2 courses that I know of and they are... starting a small business and self assessment. They are free and last for about half a day. Andy Link to comment Share on other sites More sharing options...
BqarbaraL Posted January 9, 2014 Author Share Posted January 9, 2014 You're self-employed, not Alamy's employee, so Alamy pay gross and you account for it as part of your income. Presumably you have already notified HMRC. Well not yet... Not earned a penny yet.... Link to comment Share on other sites More sharing options...
spacecadet Posted January 9, 2014 Share Posted January 9, 2014 It's a legal requirement to notify within three months that you have started to trade, regardless of any sales. There's a £100 fine for failure to do so.You can then apply for exception from class 2 national insurance. Link to comment Share on other sites More sharing options...
BqarbaraL Posted January 9, 2014 Author Share Posted January 9, 2014 O right I will ask my other half to look into it...he sorts all that kinda stuff out...thanks for the info.... Link to comment Share on other sites More sharing options...
spacecadet Posted January 9, 2014 Share Posted January 9, 2014 Don't panic about the deadline, they say it's only meant for wilful refusal to register. Link to comment Share on other sites More sharing options...
BqarbaraL Posted January 9, 2014 Author Share Posted January 9, 2014 .. I don't want the taxman knocking at my door...asking for something I haven't earned yet.. and not lightly to earn... Link to comment Share on other sites More sharing options...
Martin P Wilson Posted January 9, 2014 Share Posted January 9, 2014 Don't forget that you can set your expenses against your income, including an appropriate part (capital allowance, depreciation) of your capital costs (cameras for example). So if your income is modest (e.g. from Alamy only) you are likely to working at a loss - I believe you may able to offset that loss against other income such as a salary (used to be the case, not sure if it still is s I have not been in that position for a long time, salaried that is!). However it is not straightforward as it should be only that proportion of expenses that is "wholly and necessarily" incurred in the business of generating the income. So you need advice, either by attending the HMRC courses, careful reading or from a good accountant. Link to comment Share on other sites More sharing options...
KWheal Posted January 9, 2014 Share Posted January 9, 2014 Also can claim 44p per mile travelling to and from photo locations by car and many other things. (don't forget to insure your car for business use, it normally doesn't add anything on ) As mentioned you can claim class 2 NI exemption which lasts for 3 years if your income is below a certain level (about £5000 I think). If you register as self employed but don't apply for exemption you get hit for class 2 NI also. I didn't register as SE inside 3 months and copped the fine but after contacting them explaining it was an oversight they let me off. And yes, you can claim losses against taxes paid on other income. Link to comment Share on other sites More sharing options...
Martin P Wilson Posted January 9, 2014 Share Posted January 9, 2014 And you should insure your equipment as a professional, include public liability insurance in case someone trips over your tripod or you knock a valuable;le vase off a table! I have £5million cover (because I sometimes shoot trackside at motorsport events) but £2million is more usual and inexpensive. You will need it for media accreditation at many events (think of the cost if you injured a celebrity on a red carpet). Your home insurance may well not pay out if you are using your kit professionally as it will be an undeclared material fact (additional risk). If you take on commissions rather than shooting speculatively then you should also have professional indemnity insurance in case the shoot goes wrong - think of the consequences if you lost the images from a wedding because of a mistake or even equipment failure. Link to comment Share on other sites More sharing options...
Bryan Posted January 9, 2014 Share Posted January 9, 2014 I was told by a professional tax adviser that you can claim your losses against other income, as many businesses make a loss in their first few years of trading, but they will call a halt if it goes on too long ( four or five years?). From memory, and I may have got this wrong, there is a tick box on the self assessment form for the purpose. Make hay while the sun doesn't shine! I would endorse the view that it is worth attending the free HMRC courses, they take the mystery out of it and give you some idea where there is latitude and room for common sense, for example by claiming a realistic proportion of some expenses such as a mobile phone, depreciation on computer, mileage etc. The thing that they hammer home is the necessity for proper record keeping and the need to have invoices as proof of expenditure. Link to comment Share on other sites More sharing options...
Stokie Posted January 10, 2014 Share Posted January 10, 2014 I endorse everything that Bryan has said above. I've made a loss on my photography for the last few years (my main business is building design/planning) and have offset the losses against my profit from the design business. I've claimed for cameras, lenses etc and mileage - well worth doing. The tax courses are excellent, they are also well worth doing. Incidentally, is anybody else having problems quoting and cutting and pasting? It worked until a couple of days ago. John. Link to comment Share on other sites More sharing options...
radharcimages Posted January 10, 2014 Share Posted January 10, 2014 I was told by a professional tax adviser that you can claim your losses against other income, as many businesses make a loss in their first few years of trading, but they will call a halt if it goes on too long ( four or five years?). From memory, and I may have got this wrong, there is a tick box on the self assessment form for the purpose. Make hay while the sun doesn't shine! From memory it was 3 full tax years to make a profit otherwise it can be looked on as a hobby and you can then be liable for all the deductions made in the preceeding 6 years plus fines etc. I only know this because I had an injury which kept me out of action for a year overlapping the end of the tax year in year 5 of the business. The tax man wanted to know how I could go from profit back to 2 years losses and yet supposedly sustain the business. Easy enough for me to explain, I wasnt doing commissioned work! They did say they do keep an eye out for 'hobby' businesses and a couple of fields in particular come up for regular inspections (photography being one of them as people think they can offset equipment costs, mileage, holidays etc without ever making a living wage profit). I too can emphasise enough the advantages of going through one of the hmrc courses. They will tell you all of the above and give you an idea of whether its worth your while even attempting to claim any expenses. Ive always found them very approachable and always good with any particular questions. On one of my courses it was filled with people with horror stories of how they thought they were doing the right thing according to advice they had been given by friends and net forums, rather than geting it straight from the horses mouth. Plus the rules change regularly enough so its worth getting refreshers, even if you have an accountant. Link to comment Share on other sites More sharing options...
spacecadet Posted January 10, 2014 Share Posted January 10, 2014 I don't think I'd be taking advice as to what is allowable and what isn't from the Revenue. The law decides that, not HMRC. My only ever enquiry was because of double counting of a pension contribution. Although they had every piece of paper I could find, not a word was said about my deductions and it never has been in 30 years. Link to comment Share on other sites More sharing options...
BqarbaraL Posted January 10, 2014 Author Share Posted January 10, 2014 Ahh.. yes it's a hobby at the moment...I don't have any other income ..It will get sorted and I don't intend to claim on any of my equipment... Thanks for all your help guys.... http://www.hmrc.gov.uk/guidance/selling/examples.htm Link to comment Share on other sites More sharing options...
spacecadet Posted January 10, 2014 Share Posted January 10, 2014 You should certainly be claiming for your equipment- you can show a loss to carry forward against future profits. The example you gave isn't what you're doing. You're a professional photographer. The online aspect of it is incidental. you're not selling goods through an online intermediary. Link to comment Share on other sites More sharing options...
BqarbaraL Posted January 10, 2014 Author Share Posted January 10, 2014 I will have to get this sorted ...Now I need to get in touch with the tax office soon....I have tried to phone them .. .. Cheers Guys,,, Link to comment Share on other sites More sharing options...
DavidLyons Posted January 10, 2014 Share Posted January 10, 2014 Any hobbyist / professional thinking they can make money and not declare it to the tax man is making a big mistake. They DO check and contributors to modern online agencies are an easy target. Some here might advise that you can write off holiday travel, equipment etc. but tax inspectors and the law are very specific about the difference between professional activity and amateurs trying to reclaim the cost of a new lens or leisure travel etc. If they see no clear intention of making a profit (a real profit) within a reasonable time they will regard your photography activity as fraudulent. You will be fined, you will have a criminal record, and you may find it difficult to acquire credit etc. For the sake of saving £200 per year? The tax office is aware that there are a number of people contributing to stock libraries whose main intention is tax evasion rather than a realistic attempt to sell photographs. And they know that these are likely to be people who do not rely on photography as their main source of income. It may all sound innocent enough (and even fun) but this is not how the tax office sees it. Why Billy Bragg named his third album "Talking with the Taxman About Poetry" ! As a long time full time professional I have been aware for some years that photography is one of the activities flagged up by the tax office as being an area where tax abuse is likely to happen. I myself have been called in and all my commissioned and stock accounts gone through with a fine tooth comb. I have been "established" on the tax office radar as a professional for a long time. And I know exactly what is "reasonable" in the eyes of the tax man and the law. Even so, it is not easy to remember exactly what that particular expenditure / income relationship was six years down the road. Be careful. Your country needs your taxes. Now the big players seem to be immune they are gunning for the easy prey - us little guys. As radharcimages advises - definitely worth taking advice directly from hmrc (the tax office) - they are the ones with the guns and the magnifying glasses and they are the ones will be shooting at you. Link to comment Share on other sites More sharing options...
spacecadet Posted January 10, 2014 Share Posted January 10, 2014 The OP obviously has no intention of not declaring her income. It's a bit scary to talk of fraud, fines and criminal records. They're reserved for the most serious evasion, not for £1000 of misapplied allowances as your figure would imply. The law refers to a trade being carried on 'with a view to profit', not intention, and it's a wide definition. I have run losses for several years running with no particular interest being shown by the Revenue. One is not suddenly going to find oneself fined and prosecuted because the taxman doesn't think you should have claimed for a trip to Benidorm on which you took many photographs. Where, how, and how efficiently, you conduct your business is none of his business as long as your returns are lawful and no-one should be frightened of claiming a legitimate expense because he thinks the Revenue won't like it.. Link to comment Share on other sites More sharing options...
Martin P Wilson Posted January 10, 2014 Share Posted January 10, 2014 At the end of the day a good accountant is the key; HMRC take a view on the practice of accountants - clients of conservative risk averse accountants tend to be low on the HMRC lisy of risk based targets. But you need to make enough money to cover the fees. If you are not then you are likely to be of marginal interest to HMRC if you are trying to do the right thing. Link to comment Share on other sites More sharing options...
BqarbaraL Posted January 10, 2014 Author Share Posted January 10, 2014 Any hobbyist / professional thinking they can make money and not declare it to the tax man is making a big mistake. They DO check and contributors to modern online agencies are an easy target. Some here might advise that you can write off holiday travel, equipment etc. but tax inspectors and the law are very specific about the difference between professional activity and amateurs trying to reclaim the cost of a new lens or leisure travel etc. If they see no clear intention of making a profit (a real profit) within a reasonable time they will regard your photography activity as fraudulent. You will be fined, you will have a criminal record, and you may find it difficult to acquire credit etc. For the sake of saving £200 per year? The tax office is aware that there are a number of people contributing to stock libraries whose main intention is tax evasion rather than a realistic attempt to sell photographs. And they know that these are likely to be people who do not rely on photography as their main source of income. It may all sound innocent enough (and even fun) but this is not how the tax office sees it. Why Billy Bragg named his third album "Talking with the Taxman About Poetry" ! As a long time full time professional I have been aware for some years that photography is one of the activities flagged up by the tax office as being an area where tax abuse is likely to happen. I myself have been called in and all my commissioned and stock accounts gone through with a fine tooth comb. I have been "established" on the tax office radar as a professional for a long time. And I know exactly what is "reasonable" in the eyes of the tax man and the law. Even so, it is not easy to remember exactly what that particular expenditure / income relationship was six years down the road. Be careful. Your country needs your taxes. Now the big players seem to be immune they are gunning for the easy prey - us little guys. As radharcimages advises - definitely worth taking advice directly from hmrc (the tax office) - they are the ones with the guns and the magnifying glasses and they are the ones will be shooting at you. The OP obviously has no intention of not declaring her income. It's a bit scary to talk of fraud, fines and criminal records. They're reserved for the most serious evasion, not for £1000 of misapplied allowances as your figure would imply. The law refers to a trade being carried on 'with a view to profit', not intention, and it's a wide definition. I have run losses for several years running with no particular interest being shown by the Revenue. One is not suddenly going to find oneself fined and prosecuted because the taxman doesn't think you should have claimed for a trip to Benidorm on which you took many photographs. Where, how, and how efficiently, you conduct your business is none of his business as long as your returns are lawful and no-one should be frightened of claiming a legitimate expense because he thinks the Revenue won't like it.. OMG what have i started, I have taken Davids comment personal .. I have never deceived anyone and have payed all my taxes during my working life and claimed not a thing...I may have got this thread wrong but is some one implying that I am that I am trying to defraud the "taxman" ... That is not the case I wouldn't have asked a question on here if I didn't want to pay tax on any income I might earn on this site.. "fat chance of that tho" .. you have made me feel very uncomfortable now..... I don't want know if I want to sell any images or even carry on with this site .. How can I be judged when you don't know me... ONE UPSET & angry woman tonight.. Link to comment Share on other sites More sharing options...
DavidLyons Posted January 10, 2014 Share Posted January 10, 2014 Any hobbyist / professional thinking they can make money and not declare it to the tax man is making a big mistake. They DO check and contributors to modern online agencies are an easy target. Some here might advise that you can write off holiday travel, equipment etc. but tax inspectors and the law are very specific about the difference between professional activity and amateurs trying to reclaim the cost of a new lens or leisure travel etc. If they see no clear intention of making a profit (a real profit) within a reasonable time they will regard your photography activity as fraudulent. You will be fined, you will have a criminal record, and you may find it difficult to acquire credit etc. For the sake of saving £200 per year? The tax office is aware that there are a number of people contributing to stock libraries whose main intention is tax evasion rather than a realistic attempt to sell photographs. And they know that these are likely to be people who do not rely on photography as their main source of income. It may all sound innocent enough (and even fun) but this is not how the tax office sees it. Why Billy Bragg named his third album "Talking with the Taxman About Poetry" ! As a long time full time professional I have been aware for some years that photography is one of the activities flagged up by the tax office as being an area where tax abuse is likely to happen. I myself have been called in and all my commissioned and stock accounts gone through with a fine tooth comb. I have been "established" on the tax office radar as a professional for a long time. And I know exactly what is "reasonable" in the eyes of the tax man and the law. Even so, it is not easy to remember exactly what that particular expenditure / income relationship was six years down the road. Be careful. Your country needs your taxes. Now the big players seem to be immune they are gunning for the easy prey - us little guys. As radharcimages advises - definitely worth taking advice directly from hmrc (the tax office) - they are the ones with the guns and the magnifying glasses and they are the ones will be shooting at you. The OP obviously has no intention of not declaring her income. It's a bit scary to talk of fraud, fines and criminal records. They're reserved for the most serious evasion, not for £1000 of misapplied allowances as your figure would imply. The law refers to a trade being carried on 'with a view to profit', not intention, and it's a wide definition. I have run losses for several years running with no particular interest being shown by the Revenue. One is not suddenly going to find oneself fined and prosecuted because the taxman doesn't think you should have claimed for a trip to Benidorm on which you took many photographs. Where, how, and how efficiently, you conduct your business is none of his business as long as your returns are lawful and no-one should be frightened of claiming a legitimate expense because he thinks the Revenue won't like it.. OMG what have i started, I have taken Davids comment personal .. I have never deceived anyone and have payed all my taxes during my working life and claimed not a thing...I may have got this thread wrong but is some one implying that I am that I am trying to defraud the "taxman" ... That is not the case I wouldn't have asked a question on here if I didn't want to pay tax on any income I might earn on this site.. "fat chance of that tho" .. you have made me feel very uncomfortable now..... I don't want know if I want to sell any images or even carry on with this site .. How can I be judged when you don't know me... ONE UPSET & angry woman tonight.. Not at all meant as personal BqarbaraL and my sincere apologies that it came across as such. Link to comment Share on other sites More sharing options...
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