UKC

I work full time in a non photography related job and Ive had the chance to make some money with a photography commission for a large company. My question relates to VAT and earnings, this would be the first time Ive done any extra work (outside my regular job) so how do I declare and account for VAT? The company will need proper invoices rather than 'cash in hand' type work. I hope to do more work like this in future as well. Any thoughts would be welcome.

In reply to Joss: If your turnover is less than £79,000 p/a (which I assume it will be) then you do not have to reister for VAT.

In reply to Oceanrower: See in particular "Goods and services outside the scope of VAT"

http://www.hmrc.gov.uk/vat/forms-rates/rates/rates.htm

In reply to Joss: If your not VAT registered then its not an issue, you just invoice as a 'Sole Trader' or a Ltd company.As for tax on the income, Im sure someone smarter than I will be along to point you in the right direction.Its good that you are thinking about this though, many folk would just take the cash.What sort of work is it? Would it be worth setting up suitable Professional indemnity/public liability cover?

In reply to Joss:

You don't neccessarily need to be vat registered, depending on your existing income, but by law you should declare any additional income above and beyond your PAYE through self assessment.

Creating an invoice is simple, plenty of examples online.

Good luck.

In reply to SeanB:
Thanks, its a photography commission to supply framed prints of the locality for a new office.
Yeah forgot to mention income tax which is the most important one I guess..

In reply to Joss:

Talk to an accountant: it'll cost you a couple of hundred quid if you want to set up and company but a good one will make life much easier (mine certainly does) and will pay for himself (mine certainly does).

In reply to Joss:

Hi Joss, awesome that you have your first commission.

There are some really complicated numbers and terms being thrown about here but unless I am missing something then it seems simple to me.

I have worked self employed for myself for 8 years with a small sideline including photography so this is where I am coming from.

You have a job. You pay taxes on your income through that job. (through PAYE probably)
You also have a 'piece of work' that is going to get you money. They are earnings and need to be taxed.

You found that work yourself, therefore for that time you are self employed. That is what you need to register as. Self employed sole trader. {FYI VAT has nothing to do with it and you dont need to set yourself up as buisness, it can just be in your name}

You need to keep and account (excel sheet perhaps) of how much you earned and when (IE the invoice you will send)

then you can do one of two things come the end of the tax year:

Fill in the online self assessment: it has all the bits you need to know about declaring income from other jobs etc. (for you this should be simple if it is only one job or series of jobs for this client)
or
you give your account sheet to an accountant and he files it and charges you a sum. (I use this method but when your main income is sole trader self employed from lots of sources and you claim things back agains tax then it becomes a bit more complicated)

I would suggest thats the way to go.

Hope that helps

Rob

(btw - I would thoroughly recommend that you look up the website shakodo.com for photography pricing to make sure that you are not selling yourself short like a lot of amateurs entering the semi pro world do- they are really helpful and a wealth of advice)

In reply to Joss: What Robjob says above sounds spot on for me. I was earning some extra income last year from photography alongside the main job (now gone f/t with the camera) and it worked exactly like that. Little tip - dig out all your receipts for any photography equipment or anything else related that you've bought in the previous three years, I think it is, from the time that you register yourself with HMRC. It should all be deductable, so you might just find that in year one or two if your income isn't massive you may end up paying little or nothing at all.