Our qualified accountants have many years experience in submitting accounts for writers and authors to HMRC. Our accountancy services are ideal for writers submitting occasional articles to full time authors who are looking to optimise their tax and understand their accounts.
Are you Tax Efficient? Contact us NOW.
The first important question – are you employed or self- employed? If you don’t work directly for a publisher or news organisation then you are likely to be self-employed.
Our tax experts will determine if your income from self employment should be referred to as trading income. We manage your account so that you will pay any tax due twice a year through the Self Assessment system.
Your dedicated accountant will help you if you are working on multiple contracts in the UK and abroad. Our experts will assist you with both optimising your tax so you only pay what is due and are fully compliant with the law. Nobody wants an HMRC investigation but with the complexity of UK tax law it is very easy to get yourself in to trouble and we aim to give our clients piece of mind.
Income streams
Working as a writer your income can come from a variety of sources e.g. ad-hoc articles, copy writing and books – all must be accounted for.
HMRC must ensure people are correctly classified as being employed or self-employed. The exact rules to determine the position are defined by HMRC and our tax expert will assist you in correctly registering.
In exceptional circumstances, some writers and authors may qualify for what is termed Reserved Trading Income Status (previously known as Reserved Schedule D Status). They will continue to be taxed on income as if they were self-employed so long as tax liabilities are properly discharged and there is no break in their employment.
What expenses can Writers and Authors claim?
Expenses are defined as being necessary for the operation of your business. We have provided a list of typical tax deductions available for writers and authors:
- Marketing costs – Business cards, reprints of your work.
- Website costs – Hosting and maintaining a website to promote your work
- Travel expenses – Train tickets, petrol costs.
- Accommodation – Hotels during overnight stays for business.
- Computing equipment – Laptops, printers and editing software.
- Insurance for your computing equipment – Protect your livelihood.
- Commissions – Fees paid to literary agents.
If you are self-employed and work from home then we can advise you household costs which can be offset including heating, using a room as an office and phone services.
Working abroad
The United Kingdom has Double Taxation Agreement with many countries. It is your responsibility to minimise the tax paid in the other country and we can help you do this. If a tax can be avoided or reduced, and the taxpayer does not take action to organise this, HMRC can deny the relief and it is our job to ensure this doesn’t happen.
If a country is not covered by the Double Taxation Agreement we will advise you to ensure you are compliant and therefore don’t pay more than you need.
What are the top mistakes Writers & Authors make on their tax returns?
A common error is to show income after deduction of agent’s commission and VAT. Gross income, before deductions, should always be shown, with a separate claim being made for the commission and VAT costs.
Last year a new problem cropped up, in the form of the new cash basis, described by HMRC as simplified expenses. Opting for this denies writers the ability to set losses off against other income, and limits certain claims to expenses. The earnings basis where income is declared as earned, rather than as received, and where expenses are declared as incurred allows more flexibility.
Next steps
To find out more about how The Showbiz Accountant could help your business, call Keith Rennie (Managing Partner) in the UK on: 0203 972 0155.
To schedule a call or email a question please click here.