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Don't panic, B. You're not going to be fined, prosecuted or anything of the sort. Just notify the Revenue and do a bit of research on keeping accounts. They don't have to be complicated for a small business.

One accountant of my aquaintance regarded letters from the taxman as fan mail.

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If there is one thing that we photographers love to do is to vastly overcomplicate matters grrrrrrrr.

 

"De minimis non curat lex" UK law does not concern itself with trifles and a few quid is not going to start a full blown HMRC investigation; so back to basics: tell HMRC what you are up to asap; do keep records in order that you can justify everything you may enter into your books be it income or expenses; if you have any doubt and can't yet justify the expense of an accountant ask the Revenue, they can be very informative; if you have a doubt and wonder if something can be claimed ask the Revenue!

 

Do enrol on HMRC's self employment and self assessment courses; I found both very helpful; finally the word that came up time and time again when I attended my courses was "reasonable" I would also add "justifiable"; when I upload my 2012/13 self assessment very shortly to the Revenue if necessary I can justify every figure.

 

I am NOT an accountant; my opinions are just the result of my experiences with the Revenue, loads and tons of research and a very useful long relationship with an accountant.

 

G'luck, Peter.

Edited by peterjones
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Firstly I would say claim for all you are legally entitled to because the taxman will soon claim their share if you have a massive commercial sale (they are out there and when they happen they can soon become viral over stock forums so the taxman could find them)

 

Secondly if you are making money but not a lot (or even a loss) the online tax return is simple. Under a certain amount (not sure of the figure but it says on the form) you do not have to do a breakdown, just in / out although if you are offsetting losses against other income it may be advisable.

 

The form is very easy to complete and no need for an accountant and if you do get stuck hmrc on the other end of the phone are very helpful. Once you start earning good money an accountant may be advisable as they say what you pay him he will probably save you but from what you are saying this maybe some years off

 

Good Luck and do not be put off, it is quite simple and as long as you do not take the p**s with your expenses then you will be ok

 

Sometimes these forums can give overcomplicated advice and can put off people. Remember you can find a scare story about anything if you ask enough people. I am by no means an expert but within 2 years of doing my own returns I was able to assist friends with their tax returns for simple 1 man start up businesses just by what I did learn as I went along

 

Kevin

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Just another thing. If you do not use an accountant keep it simple at first. 44p a mile, camera equipment and repairs . Parking when  you get to somewhere your are photographing. Entry fees to locations you are taking photos at. In other words, if you spend money to achieve your photography you can probably claim it. Remember, if you use your camera for social use as well, you can only claim a percentage of purchase prices.

 

There are many other things that you can claim for but that's when it starts getting complicated and I for one do not bother but its something an accountant may address

 

Kevin

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I'm pretty sure that Alamy will be asked for notifications of payouts to contributors over a certain figure by HMRC - Rex certainly is and their usual annual note to contributors over £1,000 arrived this morning !

 

When I used to travel my accountant was very careful to make clear the personal element of any trip and to actually hold over some fares etc until sales had been made to match these against tax.

 

The advice to contact them before they contact you is sound - it is your responsibility to pay tax due - and if they think you are trying to pull a fast one they will be inclined to be more watchful - even if you are a 'hobbyist' with a small income you are liable for tax as it is 'income' in the same way that interest on a bank account is.......

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you cant claim for tyres, fuel, garage in the UK as suggested by Phillipe (may be the case in Belgium). That's all covered in the 44p per mile

 

Kevin

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It's an option. You can claim mileage or the business proportion of actual expenses. Mileage is advantageous, especially  if you forget about depreciation, and the accounting is much easier.

Edited by spacecadet

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If your business or 'other' job is completely separate from stock photography you can still convince HMRC that it is a proper viable venture - however do not try to place obvious family holidays as legitimate expenses - the clue is in the old Inland Revenue mantra "Wholly and Necessarily" - you can  be brought to task for 'attempting to obtain a pecuniary advantage' - the old fraud law - and that is not at all a joke !

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Personally I don't try to claim parts of holidays for shooting stock, it can be a minefield. I find it's a lot easier, as with a car, to claim only expenses wholly for business purposes. A stock or commission trip is that and a holiday is just that. Since I am also VAT registered it makes life a lot easier to have business accounts i.e. my mobile is a purely business account so no need for apportioning out personal use.

 

If a signifcant amount of money goes through the business I always advise getting an accountant to actually finalise accounts. They will save you more than the few hundred pounds they charge to oversee the accounts.  I do all my basic record keeping/accounting myself (inc my VAT returns) using a simple £5 excel spreadsheet pack from Ebay (bought many years ago). I just email it to my accountant and add in other income for him to work his magic for HMRC.

 

As for cars, as Mark mentioned, there are two ways of calculating expenses in UK. You can use the mileage allowance or the actual expenses apportioned out business v private use. I had one year when one car was used solely for business and I claimed expenses rather than my usual mileage allowance. Personally if a car is dual use I would use the allowance, especially if VAT is involved (although VAT allowance is a separate spreadsheet calculation with engine size).

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Well guys.. thanks for all the advice....I have also had advice from someone who is self employed "not in photography" .. I showed him the forum on how much members are earning on this site... the outcome was.. If I am not going to join a number of stock sites and put up a few 1000s images very  soon  its just not worth employing an accountant  to sort my income out.. ""yes what income"  .

   Some of the  members who have been doing stock for years and have 1000s of stock on this site and I suppose others sites as well are only topping there full time  wages up...  well I don't want to go down that road I never intended to join any other stock site, .. This was just a little pastime for me .I have never been out to take stock pics.. all the pics I have put up are already on my drives...O yes I don't want to be a pro... Don't have the motivation to go down that road..I have worked too hard all my life and now I have retired I am happy to sit with my feet up...Yes I will still use my cameras for my own enjoyment .....I want to  enjoy my photography without having to worry about key wording  or if its sharp enough is there any dust bunnys flying about...No I have decided its not for me.. I would like to say thank you to all the member who supported me over the past few months..you are so kind...I have deleted my few measly pics and hope the managers will not take too long in sorting that out for me...

 Best regards to you all.... have a good 2014 ...

     Barbara

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Sorry to hear it and I hope you haven't made it because of the tax question.

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I wonder that one of two of the posts have put you off? ..... pity!

 

G'luck, Peter.

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The mileage allowance is £0.45 per mile up to the first 10,000 business miles pa not £0.44.

 

I am sure that Alamy contributors who hold down full time jobs with HMRC must be reading this thread with wide open eyes and great interest.

 

Peter.

Edited by peterjones

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........................... deleted.

Edited by peterjones

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'Wholly and necessarily', yes, but if you're self-employed, not 'exclusively'.

As to fraud, I beg to differ- HMRC don't even refer to tax evasion as fraud themselves.

http://www.hmrc.gov.uk/reportingfraud/online.htm

I never said 'Exclusively'

...and differ you may do but the first line on your reference page refers to 'customs or excise fraud, or tax evasion' - did you read it ?

....and I do know of a photographer who fell foul of the old Inland Revenue and very much regrets it !

 

Barbara, sorry if all this has put you off - there is nothing whatever to stop you pursuing stock photography as a hobby and not getting involved in claiming tax allowances without any problems whatever, just declare the income, as you would do for bank interest or any other type of 'Income' on your assessment form.

 

It is the world as it is - not as we would like it to be.....

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'you cant claim for tyres, fuel, garage in the UK as suggested by Phillipe (may be the case in Belgium). That's all covered in the 44p per mile'

Incorrect on two counts

'The mileage allowance is £0.45 per mile up to the first 10,000 business miles pa not £0.44.'

 

Which goes to show that you shouldnt take tax advice from anyone on this forum (including me) as none of us are qualified and those that are probably wouldnt be allowed to give 'advice' on any forum in case its taken as read.

 

' Some of the  members who have been doing stock for years and have 1000s of stock on this site and I suppose others sites as well are only topping there full time  wages up...  well I don't want to go down that road I never intended to join any other stock site, .. This was just a little pastime for me .I have never been out to take stock pics.. all the pics I have put up are already on my drives...O yes I don't want to be a pro... Don't have the motivation to go down that road..I have worked too hard all my life and now I have retired I am happy to sit with my feet up...Yes I will still use my cameras for my own enjoyment .....I want to  enjoy my photography without having to worry about key wording  or if its sharp enough is there any dust bunnys flying about...No I have decided its not for me.. I would like to say thank you to all the member who supported me over the past few months..you are so kind...I have deleted my few measly pics and hope the managers will not take too long in sorting that out for me...'

I think you miss the point Barbara. I was telling the story today of an image I took that I didnt think would ever earn me a penny and on three occasions should have ended up in the recycle bin. That image so far has earned me in excess of 10k. Ive a couple of images that have earned me in excess of 10k.

You dont have to have 1000s of images (as opposed to some of the nonsense views on this forum) up or or be in it years and years to make a number of significant sales.

As the advice goes better to contact the tax man and register legitimately and live in hope than worry about it after the fact.

Many people will tell you that something they read on the internet is fine and that they have never had a problem, then there are others who have had things questioned as part of a 'normal' or 'regular' audit who will tell you differently. I would never ever like to get on the wrong side of HMRC and whilst they may not be final arbiters of tax law I tend to seek their advice every time I have a question rather than rely on something read on a forum or call a friendly accountant who may just tell me to ring HMRC to check. They are friendly enough and as other people have mentioned they are reasonable and will help guide you. Of course the ultimate decision is yours.

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'you cant claim for tyres, fuel, garage in the UK as suggested by Phillipe (may be the case in Belgium). That's all covered in the 44p per mile'

Incorrect on two counts

'The mileage allowance is £0.45 per mile up to the first 10,000 business miles pa not £0.44.'

 

Which goes to show that you shouldnt take tax advice from anyone on this forum (including me) as none of us are qualified and those that are probably wouldnt be allowed to give 'advice' on any forum in case its taken as read.

 

45p per mile - from the horse's mouth (under 'Motoring expenses' and associated two links to .pdfs - figures are in the .pdfs).  All tax advice is justified if it's backed up with references to genuine sources (same goes for anything you read on any Wiki ^_^)

 

UK rules are very clear and all details are available via HMRCs Website.  Either submit yourself to the hell of working out %age's of use for private/personal plus %age for all maintenance etc. (retaining all bills) and  the added confusion when you buy/sell (I can see this being worthwhile if you do a lot of business and can justify an accountant to do all the sums for you, but not otherwise!) or just claim a straight 45p per mile for all business use.

 

TBH, I'm glad that I read this thread as I was unaware it had gone up - I've still been claiming 40p per mile - doh!

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But personally, I enjoy the business part as much as the photography itself. Running a little business all by yourself, taking decisions and initiatives all by yourself, the freedom, and - last but not least - the rewarding feeling I never experienced when I worked for a boss (used to work in the field department for a large American marketing corporation where my name was .... "N°112"). I even like the keywording, adding the right captions and the research involved. I see keywording as fishing, where I have to decide which "bait" to use  :D

 

I do realize though, it's not for everyone. I have no kids going to college, my little cave is completely paid for and I don't give a damn about luxury :D I prefer "freedom" instead. Never regretted my decision, not even for a day.

 

Pretty much sums up my attitude too. I walked out of the Civil Service 37 years ago when I found myself almost literally hitting my head on a brick wall in frustration (I did hit my fist on a brick wall but luckily stopped short of my head). Apart from a brief lucky break when I earned obscenely large amounts of money in Silicon Valley for a couple of years, I've been my own boss since 1977 and can do whatever I enjoy. I don't give a toss about the money as long as I can pay the bills.

 

I do envy you for your cave though. I sold mine a couple of months ago because there's nowhere to park it where I live and I got tired of people knocking at the door asking me to move it. dnaf0260.jpg

 

Alan

Edited by Inchiquin
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Ahum! By "my cave" I mean my little appartment ;)

 

Ah, I thought you were talking about your campervan.

 

Alan

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  Either submit yourself to the hell of working out %age's of use for private/personal plus %age for all maintenance etc. (retaining all bills) and  the added confusion when you buy/sell (I can see this being worthwhile if you do a lot of business and can justify an accountant to do all the sums for you, but not otherwise!) or just claim a straight 45p per mile for all business use.

 

 

 

Its not really an either or....

...you could have 2 cars, one for personal, one for business. ;-) Thats one of the simplest solutions available.

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