I'm currently in flux in deciding what to do with my 'writing life.' I am eagerly preparing for my MA in September, but I'm also keeping an eye on on the jobs pages. I am doing lots of festival performances, but I'm also open to new opportunities.
Yesterday, I wrote about whether your writing is an hobby or if you are self employed (even if you don't know it!)
However, should you decide to make writing your business, here are a few things to think about. If you decide to become a self employed writer the HMRC will see you as a sole trader. Unlike when you are writing for a hobby and you have to pay for things such as Writing Magazines, stamps, a couple of back issues of a magazine so you are familiar with the basic style - these can suddenly become business expenses.
There is a massive list of what can be called business expenses. Check out:
Remember that you can only claim for items used solely for your business. Some of the things that a writer maybe able to claim for are:
- Proofreading and copy-editing services
- Setting up a website
- Travel costs for business trips
- Postage, phone bills, internet, software (grammarly) and stationery
You need to keep accurate records. Keep all bills, receipts, invoices, PayPay notification etc.
Add up everything you earn from your writing - turnover.
Then add up everything you have had to pay out - expenses.
If your turnover is more than your expenses you have made a profit.
If the expenses are more than your turnover you have made a loss.
You have to set this against any other income such as earnings from other employment and savings. If you earn less than your personal allowance (£9,440 for 2013-2014) you can carry that loss forward so you pay less tax the next year when you hit it big and get that three novel book deal from a leading publishing house plus film rights..
If you send work to the US that income can be affected by the IRS!
Remember - everyone's situation is different when it comes to tax. So if a fellow writer is not doing the same thing you are, they may not be doing anything wrong. It is more likely that the are in a different category to you. And it is another reason not to take tax advice from other writers and go instead to the HMRC help line. For example I know my personal allowance - I have no idea what it is if you were born before 5 April 1948 - it's all different.
Keep records - be honest - and ask for help from the HMRC