What Tin Artists Claim Equally Trace Of Piece Of Occupation Organisation Expenses - For Revenue Enhancement Purposes?

Here's a listing of concern expenses which tin commonly live on claimed for taxation purposes past times an creative someone who is making a serious endeavour to sell fine art as well as brand money.

Image courtesy of Stuart Miles / FreeDigitalPhotos.net

To live on able to claim expenses as well as a self-employed condition y'all must live on conducting your concern inwards a professional person way as well as alongside the intention of making a profit.

In other words y'all must live on able to exhibit it's non only a hobby. The taxation regime volition non allow y'all to brand endless losses which fund your hobby every bit an amateur artist.

Also - y'all make demand to have

registered every bit self-employed to claim expenses
produced accounts.

Allowable Business Expenses for Artists

General principles

The full general principal which applies to artists is y'all tin claim items which y'all demand to brand as well as sell fine art - for a profit.

Thus y'all tin claim for items which are:

directly as well as wholly related to making art
generally accepted every bit normal as well as used past times many artists when making art
not unduly excessive or extravagant.

Below I've included notes nigh normal concern expenses

Do delight comment as well as propose anything else y'all hollo upwards should live on included. I'll update this postal service alongside skillful suggestions - as well as gain credit as well as a link to your blog.

Tax inwards the UK

In the NEXT taxation yr (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 live on used for really unproblematic minor concern - such every bit beingness an artist.

This is explained inwards Simpler Income Tax for the Simplest Small Businesses: Technical Note. In essence, this volition allow accounts for really unproblematic minor businesses to live on made upwards on a receipts as well as payments basis

It defines payments every bit follows

allowable payments are expenses paid wholly as well as only for the purposes of the trade, including for non-durable assets as well as payments of VAT (but excluding concern entertaining as well as buy of holding or other “investment” assets. It volition no longer live on necessary to calculate as well as claim working capital alphabetic lineament allowances.

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

Art Supplies

In full general y'all tin claim the materials used inwards making art. However this is non an excuse to striking the fine art supplies shops as well as social club all the things you've e'er wanted to own. Expenditure needs to live on proportionate to sales.

In wide price y'all should only claim the cost of stock used during the yr to brand fine art as well as attain sales.

Art Competitions / Juried Exhibitions

You tin claim:

entry fees
hanging fees
commission on sales

Computers as well as printers (and other expensive component equipment)

These are a concern expense - but how they that expense should live on treated for taxation purposes volition really much depend on what taxation regime y'all stimulate got to alive with.

In the UK, in that place has been a campaign to brand life simpler for people.

Exhibitions

Rental of spaces for exhibitions is an allowable expense. The expectation volition live on that y'all brand sales every bit a final result so I wouldn't examine this 1 every bit good oft if your sales don't embrace costs.

Framing

Framing is an interesting one. Frames are expensive - as well as y'all don't desire to stimulate got every bit good many lying only about unused! I justice most artists stimulate got reused frames as well as swopped them circular given how expensive they are.

My recommendation would live on to

avoid paying out for every bit good many unused frames.
adopt the exercise of claiming the cost of the frame when y'all brand a sale.

If y'all convey them for personal job so y'all should 'pay' for them as well as credit your concern alongside the income. That so neutralises the expenditure inwards the accounts.

If selling direct, y'all tin conform to stimulate got a motion-picture exhibit framed to the client's requirements as well as accuse the total cost remove to the customer - which has a completely neutral outcome on your accounts.

Framing for a solo exhibition at a gallery tin live on an enormous cost. If having solo exhibitions periodically, it's in all probability worth investigating the exercise of averaging costs across a menses of years so y'all don't larn all the income as well as expenses cropping upwards inwards 1 year.

Insurance

Insurance of fine art inwards an exhibition as well as inwards transit is a concern expense. You demand 3rd political party embrace if you're teaching. See Insurance for Art as well as Artists

Marketing Expenses

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

Photography

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

Be careful nigh cameras. If y'all stimulate got a photographic television camera which y'all only bought for reference photos as well as normal photography associated alongside putting go online for sale so this is a concern expense. However if a photographic television camera is used mainly for domestic/personal purposes as well as only occasionally for fine art so this in all probability brackets it inwards the "hobby" category as well as it's non eligible every bit an expense.

Watch the cost of the camera. Expensive cameras in all probability demand to live on treated similar expensive items of equipment as well as categorised every bit working capital alphabetic lineament as well as thus claimed against taxation over fourth dimension based on whatever is the regime for working capital alphabetic lineament allowances.

Postage, Shipping & Couriers

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

If y'all desire some assist inwards working out the best way to make this y'all mightiness similar to consult my really pop website How to pack, postal service as well as send fine art - Resources for Artists

Professional Education

Continuing professional person evolution is a normal concern expense. It's worth checking alongside your local taxation people what is as well as is non allowed. For illustration membership of a professional person association is commonly allowed - alongside the emphasis on "professional".

Studio

If you're renting a studio so the rent as well as whatever running costs are obvious concern expenses.

However y'all tin also claim if y'all are working from a abode studio. What y'all tin claim depends on your local taxation regime as well as these stand upwards for variations on a theme

You tin claim a reasonable amount for occupying a infinite for concern purposes. You demand to prorata things similar utility bills if the studio is inside the home. You can't claim a rent if y'all don't pay one. Keep all the paperwork for your calculations inwards instance y'all larn an audit.
Some taxation regimes insist that the room must live on dedicated every bit a studio. However, if that's the instance make live on careful that you're non causing whatever problems with planning permission - past times having a commercial activeness inside a domestic abode - and/or creating a potential futurity job alongside working capital alphabetic lineament gains taxation (if applicable) when y'all come upwards to sell alongside honor to the component of your holding which y'all job every bit a dedicated studio.
The novel UK taxation regime for minor businesses agency in that place volition live on NEW defined rules every bit to what volition live on allowed every bit concern expenses.

Use of abode for concern purposes
9. Businesses that job the abode for concern purposes tin opt to job a criterion deduction based on the amount of fourth dimension spent working at home.
10. This calculation is laid upwards out inwards department 94J as well as is every bit follows:
11.Number of hours worked at abode per calendar month x applicable amount
12.The applicable amounts are every bit 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 select to claim whatever allowable share of actual expenses.

Telephone / Broadband

Having a separate delineate for concern calls as well as your broadband simplifies greatly the number of what the split upwards should live on for domestic as well as business. It also agency y'all larn to stimulate got a dedicated answerphone message which sounds rather to a greater extent than business-like.

All telephone as well as broadband equipment (e.g. phones / answering machine / modem) mostly comes inside the remit of equipment which tin live on written off inwards 1 yr - but this is something which tin vary betwixt taxation regimes so make depository fiscal establishment check earlier assuming it tin larn downwards every bit an expense every bit opposed to an detail which needs to live on depreciated.

Travel

Artists move for a diversity of purposes as well as all journeys which are necessitated past times fine art (business) activeness are legitimate concern expenses.

plein air paradigm / collecting reference material
marketing your art
getting artwork to as well as from exhibitions / clients / galleries
collecting fine art supplies

Check your local regime to run across 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 postal service as well as the 1 terminal year, I've started a website called Tax Tips for Artists. It's a go inwards progress at the moment. Do permit me know if y'all know an article worth sharing alongside others.