Writing and HMRC - part one

It's so much fun getting cheques for your writing, but you need to take care of yourself.

I was privileged enough that once my second child was born I was able to have a career break for a number of years, there were odd times when I needed to do supply or get an odd job to make ends meet, but for the majority of the time I was in the envious position of my husband being the sole bread winner. At that time, writing was a hobby fit in between school runs and PTA meetings. Any money I earned from letter pages, the odd article or competition wins was put into a separate account. I was proud that I paid for an holiday for four to Florida and a trip to Lapland to see Father Christmas. (Obviously the money was allowed to mount up over years!) 

For those years I enjoyed writing. I entered several competitions every month. I frequently wrote to the magazines I enjoyed reading with ideas. I did not take the money for granted. Similar to a lady I knew who was obsessed with entering competitions - IT WAS A HOBBY!

Some bitter writer once reported me to the tax office. Luckily, my husband has a limited company and I was already familiar with the tax situation. I had previous contacted the HMRC to see if it affected anything. As long as you are upfront and don't try to hide anything they are really friendly.

For the next few years my husband and I were self employed running a franchise, any money that came in from writing was needed immediately. But I was protected again because everything I earned was sorted and looked at by our accountant.

Things have changed again. There is an excellent article about it in this months Writing Magazine. Just remember that in any circle of life their is always someone unpleasant who may get upset by someone else's success however small. Don't think that because the amount you have won or earned is less than the income tax threshold that you are safe!

When you speak to the HMRC what they really want to know is your intentions.

Expect questions such as;

- Do you charge for your work?

- Is there a profit seeking motive?

- Do you have clients?

So keep records! I regularly publish a writing group anthology on Lulu and Kindle - I can prove easily that I'm not using this as an income because I would be able to show the number of sales.

If you want advice - don't take if from other writers because everyone's situation is different. Contact the HMRC 0300 200 3504. 

The real question is - will the government see you as self employed?

Ah you may say - but I'm not making any money. OK did you know that if you self publish a novel on kindle and are marketing it you can still be classed as self employed. Why? Because your intention is to sell your work - the fact that you are broke and only two friends have downloaded doesn't matter. Those tweets can be seen as marketing and 'actively seeking customers.'  If you are in the process of writing your second book while tweeting about the first you could be seen as 'looking for customers while continuing production.' Your family may think that you are wasting your time, but the government may decide to believe in you. How do you know that you won't be the next 50 Shades of Grey?

So keep records of everything you gain AND everything you spend and don't be afraid - be honest.