Brand New!! What Tin Laissez Passer The Axe Artists Claim Every 2D Trace Organisation Expenses - For Revenue Enhancement Purposes?

Here's a listing of job organization expenses which tin ship away commonly last claimed for taxation purposes past times an creative somebody who is making a serious endeavour to sell fine art in addition to brand money.

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

To last able to claim expenses in addition to a self-employed condition you lot must last conducting your job organization inwards a professional person way in addition to amongst the intention of making a profit.

In other words you lot must last able to demonstrate it's non but a hobby. The taxation regime volition non allow you lot to brand endless losses which fund your hobby equally an amateur artist.

Also - you lot attain demand to have

registered equally self-employed to claim expenses
produced accounts.

Allowable Business Expenses for Artists

General principles

The full general principal which applies to artists is you lot tin ship away claim items which you lot demand to brand in addition to sell fine art - for a profit.

Thus you lot tin ship away claim for items which are:

directly in addition to wholly related to making art
generally accepted equally normal in addition to used past times many artists when making art
not unduly excessive or extravagant.

Below I've included notes well-nigh normal job organization expenses

Do delight comment in addition to advise anything else you lot retrieve should last included. I'll update this post service amongst practiced suggestions - in addition to laissez passer on credit in addition to a link to your blog.

Tax inwards the UK

In the NEXT taxation twelvemonth (2013-14) inwards the UK, HMRC are introducing a novel system called Simpler Income Tax for the Simplest Small Businesses. It greatly simplifies the methods of accounting to last used for real uncomplicated pocket-size job organization - such equally existence an artist.

This is explained inwards Simpler Income Tax for the Simplest Small Businesses: Technical Note. In essence, this volition allow accounts for real uncomplicated pocket-size businesses to last made upwards on a receipts in addition to payments basis

It defines payments equally follows

allowable payments are expenses paid wholly in addition to solely for the purposes of the trade, including for non-durable assets in addition to payments of VAT (but excluding job organization entertaining in addition to buy of belongings or other “investment” assets. It volition no longer last necessary to calculate in addition to claim uppercase allowances.

I'll write to a greater extent than well-nigh this - but it's sure enough a real attractive way of accounting for taxation for many artists.

Art Supplies

In full general you lot tin ship away claim the materials used inwards making art. However this is non an excuse to striking the fine art supplies shops in addition to social club all the things you've ever wanted to own. Expenditure needs to last proportionate to sales.

In wide price you lot should only claim the cost of stock used during the twelvemonth to brand fine art in addition to attain sales.

Art Competitions / Juried Exhibitions

You tin ship away claim:

entry fees
hanging fees
commission on sales

Computers in addition to printers (and other expensive component subdivision equipment)

These are a job organization expense - but how they that expense should last treated for taxation purposes volition real much depend on what taxation regime you lot direct keep to alive with.

In the UK, at that topographic point has been a crusade to brand life simpler for people.

Exhibitions

Rental of spaces for exhibitions is an allowable expense. The expectation volition last that you lot brand sales equally a termination so I wouldn't show this 1 also oftentimes if your sales don't embrace costs.

Framing

Framing is an interesting one. Frames are expensive - in addition to you lot don't desire to direct keep also many lying or so unused! I approximate most artists direct keep reused frames in addition to swopped them circular given how expensive they are.

My recommendation would last to

avoid paying out for also many unused frames.
adopt the practise of claiming the cost of the frame when you lot brand a sale.

If you lot bring them for personal occupation so you lot should 'pay' for them in addition to credit your job organization amongst the income. That so neutralises the expenditure inwards the accounts.

If selling direct, you lot tin ship away conform to direct keep a motion prototype framed to the client's requirements in addition to accuse the total cost direct to the customer - which has a completely neutral termination on your accounts.

Framing for a solo exhibition at a gallery tin ship away last an enormous cost. If having solo exhibitions periodically, it's likely worth investigating the practise of averaging costs across a stream of years so you lot don't larn all the income in addition to expenses cropping upwards inwards 1 year.

Insurance

Insurance of fine art inwards an exhibition in addition to inwards transit is a job organization expense. You demand tertiary political party embrace if you're teaching. See Insurance for Art in addition to Artists

Marketing Expenses

The cost of job organization cards, flyers, posters, advertisements etc are normal job organization expenses.

Photography

Professional photography fees relating to photographing artwork for catalogues, books etc is a job organization expense.

Be careful well-nigh cameras. If you lot direct keep a photographic idiot box camera which you lot only bought for reference photos in addition to normal photography associated amongst putting function online for sale so this is a job organization expense. However if a photographic idiot box camera is used mainly for domestic/personal purposes in addition to only occasionally for fine art so this likely brackets it inwards the "hobby" category in addition to it's non eligible equally an expense.

Watch the cost of the camera. Expensive cameras likely demand to last treated similar expensive items of equipment in addition to categorised equally uppercase in addition to thence claimed against taxation over fourth dimension based on whatever is the regime for uppercase allowances.

Postage, Shipping & Couriers

The expense of getting artwork to a customer or to an exhibition is a job organization expense.

If you lot desire some aid inwards working out the best way to attain this you lot mightiness similar to consult my real pop website How to pack, post service in addition to ship fine art - Resources for Artists

Professional Education

Continuing professional person evolution is a normal job organization expense. It's worth checking amongst your local taxation people what is in addition to is non allowed. For illustration membership of a professional person association is commonly allowed - amongst the emphasis on "professional".

Studio

If you're renting a studio so the rent in addition to whatever running costs are obvious job organization expenses.

However you lot tin ship away also claim if you lot are working from a abode studio. What you lot tin ship away claim depends on your local taxation regime in addition to these stand upwards for variations on a theme

You tin ship away claim a reasonable amount for occupying a infinite for job organization purposes. You demand to prorata things similar utility bills if the studio is inside the home. You can't claim a rent if you lot don't pay one. Keep all the paperwork for your calculations inwards instance you lot larn an audit.
Some taxation regimes insist that the room must last dedicated equally a studio. However, if that's the instance attain last careful that you're non causing whatever problems with planning permission - past times having a commercial action inside a domestic abode - and/or creating a potential hereafter job amongst uppercase gains taxation (if applicable) when you lot come upwards to sell amongst abide by to the component subdivision of your belongings which you lot occupation equally a dedicated studio.
The novel U.K. taxation regime for pocket-size businesses agency at that topographic point volition last NEW defined rules equally to what volition last allowed equally job organization expenses.

Use of abode for job organization purposes
9. Businesses that occupation the abode for job organization purposes tin ship away opt to occupation a criterion deduction based on the amount of fourth dimension spent working at home.
10. This calculation is laid upwards out inwards department 94J in addition to is equally follows:
11.Number of hours worked at abode per calendar month x applicable amount
12.The applicable amounts are equally follows:

25-50 hours per calendar month £10

51-100 hours per calendar month £18

101 hours or to a greater extent than per calendar month £26

13.Alternatively businesses tin ship away direct to claim whatever allowable part of actual expenses.

Telephone / Broadband

Having a separate draw for job organization calls in addition to your broadband simplifies greatly the number of what the split upwards should last for domestic in addition to business. It also agency you lot larn to direct keep a dedicated answerphone message which sounds rather to a greater extent than business-like.

All telephone in addition to broadband equipment (e.g. phones / answering machine / modem) to a greater extent than oftentimes than non comes inside the remit of equipment which tin ship away last written off inwards 1 twelvemonth - but this is something which tin ship away vary betwixt taxation regimes so attain banking concern check earlier assuming it tin ship away become downwards equally an expense equally opposed to an detail which needs to last depreciated.

Travel

Artists move for a diverseness of purposes in addition to all journeys which are necessitated past times fine art (business) action are legitimate job organization expenses.

plein air prototype / collecting reference material
marketing your art
getting artwork to in addition to from exhibitions / clients / galleries
collecting fine art supplies

Check your local regime to meet what's allowed. Normal world carry expenses are allowed. There's commonly a mileage charge per unit of measurement for cars.

Tax Tips for Artists

Following on from yesterday's post service in addition to the 1 terminal year, I've started a website called Tax Tips for Artists. It's a function inwards progress at the moment. Do allow me know if you lot know an article worth sharing amongst others.