UKC

Hi, at least half a tax question, but photography related.

I've just found out that some of my photos have been accepted for exhibition at a local gallery, exciting times. The photos are going to be for sale, hopefully I'll sell one or two. Question is how do I deal with the income it generates.

I specifically don't want to avoid paying tax, i.e. simply not declaring the income is not an option, but do want to minimise paperwork for myself i.e. preferably not end up having to complete a tax return. Any thoughts?

One possibility is putting it through my business. I own/run a limited company with me as the only employee, its main focus is consultancy (not photographic), but I've always intended it to allow me flexibility in what I do. Can I put the exhibition costs, including framing etc. through the business and then treat any sales as revenue? Aware that if the photos don't sell they'll become business assets, which may also be a hassle.

Any other ideas for dealing with the income? Must be quite a lot of photographers who end up in this situation.

In reply to Sam W:

Obvious question... how much are they going to sell for?

In reply to Sam W:

The answer is yes - the production costs on the expenses side. On the other side of the balance sheet you simply have your revenue receipts for each sale you make - with an invoice to back it up. It all goes into your overall income and expenditure account for the year.

In reply to Indy:

The gallery have said that they don't think any photo should sell for less than £200, and that in general photos are undervalued. They have only just opened, but have clients who are willing to pay that (and more) for pictures. I'll know prices more accurately once I've sorted out how much printing/framing will cost.

Putting it through the business is the obvious route, I just wasn't sure if HMRC would question it, particularly if I don't sell any and end up with 6 pictures as business assets in a company that (typically) wouldn't need them. I guess if they all sell and costs are cancelled/exceeded by income it won't be a problem.

Have a read of this:

https://www.thecompanywarehouse.co.uk/blog/2016/03/17/tax-boost-for-hobby-b...

and Section 4.6:

https://www.gov.uk/government/publications/budget-2016-documents/budget-201...

"The rapid growth of the digital and sharing economy means it is becoming easier for more and more people to become ‘micro-entrepreneurs’. However, for those making only small amounts of income from trading or property, the current tax rules can seem daunting or complex. To help make the tax position more certain and simple for these individuals, from April 2017 the Budget introduces two new £1,000 allowances for property and trading income. Individuals with property income or trading income below the level of allowance will no longer need to declare or pay tax on that income. Those with relevant incomes above £1,000 can benefit by simply deducting the allowance instead of calculating their exact expenses."

In reply to Sam W:

You definitely do have to do a tax return anyway so there's your problem solved.

In reply to Sam W:


We just bought a 1.5m panoramic 'local' landscape 'framed' on canvas in Germany for £157 euros.

In reply to Sam W:

Thanks for suggestions. Also ran the question past my sister (who's an accountant), it's fine to put it through the business although care is needed around exactly how it's recorded.

In reply to Sam W:

When you say put it through the business do you mean on your personal tax return or your company return?

In reply to Mooncat:

I mean pay for the photos and framing from my business account, and then any money that comes from the sales also into the business account.

I'm under the impression that I don't need to do a personal tax return, my salary from the business goes out PAYE and I don't take any other money from it. Correct me if I'm wrong.

In reply to Sam W:

Surely you just put the income/expenditure from your photos into your Company accounts and tax return? Your salary (paid for by your company) is a completely different matter.

In reply to Sam W:

You do need to do a personal tax return, if you're a director and your company is trading its essential criteria. The income you're talking about is none trading income so needs to go through your personal tax return you're paying tax at the wrong rate through your company return.

In reply to Mooncat:

Interesting. Have been a director of my dad's company for years (less glam than it sounds, never made any money), and have never been issued a tax return. Did a bit of googling and found this, so it sounds as though I'm at the mercy of HMRC and their decision on whether to issue a return.

http://www.accountancy.coop/informed/2014/01/company-directors-and-self-ass...

In reply to Sam W:

They won't issue one if you haven't notified them. There used to be no penalties for failure to notify if there was no tax liability, this has changed now.

Criteria for self assessment is in here, there are no grey areas if you're a director of a trading company.

https://www.gov.uk/self-assessment-tax-returns/who-must-send-a-tax-return

In reply to Sam W:

Assuming you keep decent records and have no other reason to do self assessment, it will take you about 10 minutes to do it. Then you just calculate profit as income minus expenses, put the number in and pay the tax by card after filing it. You can also look in to the annual investment allowance to offset some hardware costs against tax.


Although if I had a company I'd just run it through that. Edit: Pretty sure you should be doing SA if a director of your own comapy as said elsewhere...

In reply to Mooncat:



So where is that in statute ? .... seriously.

In reply to Sam W:

You probably ought to disclose any income as trading income from self employment but you could claim so many expenses I doubt you'd have much if any taxable profit. What were your travel costs of taking the photos, printing, display, capital allowances on equipment ....

In reply to Skyfall:

It's not, it's another of our sweeping generalisations that directors are complex. Can't imagine us challenging at 1st tier if there was no tax consequence. If there were enough challenges I'd imagine we'd have a look at policy sharpish.

In reply to Mooncat:

So would you like to retract 'there are no grey areas'?

In reply to Skyfall:

No