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  #1  
Old 14th May 2012
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Earning a few quid.

A couple of mates of mine work in the redevelopment industry, effectively refurbishing interiors of business premises .As they are aware of my interest in taking photos they asked if I'd be interested in shooting the latest finished project of theirs , if I captured some reasonable images that they could use, they would reimburse me for my time and effort.
Well it would seem they like what I gave them and may offer similar work in the future. Although what I am likely to earn is not going to allow me to retire early, it potentially could provide me with a "kit fund" that I can use for expanding my bag of toys.
What I am unsure of is how any funds I generate are banked. Do I just bank it as personal earnings (which potentially incurs doing tax returns),start a limited company and have any payments in to that ( I foresee the majority of any monies being expended on charges to keep the company running such as to banks/companies house etc. ) or are there any other options available?
I guess the crux of the question is how do I handle this potential revenue stream to ensure I get the best return on it. I am gainfully employed in a totally different industry, and still consider Photography as a hobby with this being a few hundred pounds annually at max.
. Any advice would be welcome.
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Old 14th May 2012
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Re: Earning a few quid.

I have started and run a couple of companies (profitably) and I can report it is very easy to start a company, register it for VAT and call yourself a Director.

It is also rather more difficult to wind up a company and de-register for PAYE, Corporation Tax and VAT

I guess you can start a photo company and write off any gear purchases against tax, and also reclaim the VAT on all those Pro lenses you are going to need. However if it looks like it is just a method of making a loss and have the taxman give you money, I suspect someone somewhere will spot it.

You also have to do Company House* returns and proper corporation tax returns each year. For this most mortals need to employ an accountant. Quite a lot of accountants drive nice new Audis.

...

Pete

*Why does your annual returns cheque have to be made out to "Companies House" and not "Companies House Ltd" ???
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Old 14th May 2012
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Re: Earning a few quid.

The critical thing is keeping records. IF someone gets an idea that your not legit, it could be difficult.

It is wise to inform the revenue that your looking at a possible Income Stream/Business for a potential Limited Co or a Self Employed business. However, it make take two or three years to get going or, not get going at all.

Keep a Register of all your Kit - that you will sell "to the business" and the business can claim Deprec on it and VAT (if you get anywhere near VAT registration limits on Expenses and Income).

Pete is right, Accountants drive the best cars - but some buy a well cared for pre-loved top of the range car, with low miles after the big "hit" on Depreciation

Its £30 for online filing of the Annual Return and even a small Ltd Company will cost about £475 for accounts these days (as Inland Rev have insisted on specific software for online filing ONLY) and lots of Accts did not do "enough" to warrent the s/ware costs and those who do, know how to charge
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Old 14th May 2012
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Re: Earning a few quid.

Nick.

Have a look at www.businesslink.gov.uk.

Business Link used to have a set up which included local offices a bit like Citizens Advice Bureaux but last year changed to a web based service.You will find a lot of advice on their site.

I had some experience of them when I was in industry as they used people seconded from companies or individual volunteers to act as advisors/mentors etc.

Good luck.
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Old 14th May 2012
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Re: Earning a few quid.

Could you not work as a Sole Trader?
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Old 14th May 2012
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Re: Earning a few quid.

Quote:
Originally Posted by LMGruchy View Post
Could you not work as a Sole Trader?
Beat me to it Linda, I'd just got round to thinking of that one.

Keeps you on the right side of the Tax man and avoids most other bureaucracy.

Regards.
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she looked at me and said "It's official. I hate your camera. It's just so amazing and perfect I want one!"

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Old 14th May 2012
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Re: Earning a few quid.

Quote:
Originally Posted by PeterBirder View Post
Beat me to it Linda, I'd just got round to thinking of that one.

Keeps you on the right side of the Tax man and avoids most other bureaucracy.

Regards.
Keeps the accountancy bills down, and you can still register for VAT.
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Old 15th May 2012
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Re: Earning a few quid.

I dabbled last year with very modest success - didn't cover my expenses! Now I have a tax return to complete and I've got to research what expediture I can offset against income. I've come to the conclusion that it's not worth the hassle and although I still have a few pictures in several galleries I'm kind of hoping I don't sell anything in this tax year!
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Old 15th May 2012
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Re: Earning a few quid.

I get the occasional few quid for gig reviews/photos and such like for the local paper. It's never going to add up to much, just (fairly generous) beer money at the gigs I'm reviewing. I keep a careful record and declare it as extra earned income and take the 20% income tax hit.

It helps that I only pay basic rate tax, I might feel differently if it were taxed at 40 or even 50%. At the moment HMRC still insist on me doing a tax return, which is a pain, but apparently you can declare "small" extra payments even if you don't, without incurring the need to do a full return. I'm not sure what counts as small, but they seemed to think that a few hundred would fall within it.

The main lesson, as stated by others here, is that you MUST keep accurate records.

Good luck ... John
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Old 15th May 2012
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Re: Earning a few quid.

I used to do a lot of weddings and event photography in the 80's. I used an accountant for the first year, he gave me good advice so I only used him for that year. I would do a wedding a week at least so was earning decent money and just decalred it as earnings, having taken off all allowable expenses. Keep accurate records and pay your tax is my advice.
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Old 15th May 2012
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Re: Earning a few quid.

Just a thought - Authors may take 5 years to write a book and get it published before any income derived. But they keep a record of all expenses.

You have to remember that you cannot take photos - without the camera and lens; chip & battery.

You cannot edit and process without a computer and software.

You cannot upload to a web album without Broadband.

Prints require a Printer, Inks and SPECIAL PAPER.

So you have to take account of all these expensive facilities required AND Premises, you can claim an allowance for working from home (BUT NO ONE PART is for work only, thus a spare bedroom is the "office" too ) or else Capital Gains is to be paid on sale of home

Do NOT give your hard earned Income away - NO ONE WHO IS SENSIBLE AND KNOWS gives it freely.

and do not forget CAR/Travel charge at 40 or 50p per mile and Car Parking too !

So if all the above "Kit required" comes to £10,000 - then over a 5 year business plan you would have to earn ? £nn,nnn to pay for that and then MAKE A PROFIT and Pay tax on Profits !

Hence I suggest, write to or visit with a written Business Plan/Draft set of accounts for 5 years plan - Everyone has a Local Tax Office - albeit our Winchester one is now only open 10am - 4pm on Weds & Thurs (used to be 9-5 mon to Fri ). It is then likely that you will be told, Keep Accounts, if your Income is above £??,nnn in a year THEN come back and file accounts to pay tax. ... because the cost of processing is too high for the tax possibly derived to the Mr. Camerons Club !
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Old 15th May 2012
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Re: Earning a few quid.

As a sideline I've been writing for magazines and selling photos for about thirty years. I keep careful accounts on a spreadsheet and fill in a self employed tax return at the end of the year. There's good guidance on the HMRC website as to what you can reasonably claim as expenses and capital allowance - more than you may think as others have pointed out. Some years I pay tax, in others I get a refund against my pension, although it's unlikely HMRC never gave me a refund against earned income. You may have to carry any losses in self employment over to the next year.

It's simple to design a spreadsheet that will provide year end information in the form HMRC wants it. The secret is to fill it in every time you have a transaction rather than letting a backlog build up.
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Old 15th May 2012
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Re: Earning a few quid.

Sole trader's personal tax allowance is over £8000 next year, that's a big chunk you can earn (after expenses) before they want to tax anything.
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Old 15th May 2012
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Re: Earning a few quid.

Quote:
Originally Posted by Ulfric M Douglas View Post
Sole trader's personal tax allowance is over £8000 next year, that's a big chunk you can earn (after expenses) before they want to tax anything.
But don't forget we all have either Pension and/or Investment and/or PAYE Income using the Individual Personal Allowance
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Old 15th May 2012
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Re: Earning a few quid.

I am PAYE and I know a couple fo guys who earn a bit on the side, they tell me that if they make a loss that is offset against their main PAYE income through their tax code.

This eems interesting but unlikely ?
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