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Becoming self-employed
It is usual for artists at all stages of their career tobe
great jugglers: not onlywillwebeworkingoneormore
part-time jobs, butwemay alsobe set upas sole trader
businesses or registeredas self-employed.
one of the things that can seem most daunting about all of this is filling out a
tax return. But contrary to what you may think, this is relatively easy, as long
as you have planned ahead.
So, what do you need to know? If you are employed, you (usually)
work for one organisation, are paid net of tax and have set hours of
work. If you are self-employed, you will be able to choose the work
you do, choose the hours you work and take holidays when you
like. Most artists will have a mix of income from sales of their work,
commissions, residencies, workshops, teaching, arts administration,
etc. Arts organisers can benefit from a portfolio of clients and project
opportunities. This is why self-employment can be a good thing – it
allows artists and arts organisers to work for many different people
and perform more than one type of work.
HoW Do I BEComE SElf-EmployED?
You only need to do two things. Firstly,
. Tell them you want to register as self-employed and the
date you started your business (usually the date of your first expense
rather than the date of your first sale).
Secondly, start paying
. This costs a fixed
sum per week and you can pay it monthly or six monthly (by direct
debit). If your total income is less than a certain amount per year,
you can get an exemption from paying Class 2 National Insurance.
However, paying this contribution is generally a good thing since
it counts towards your basic pension. You can find out current
contribution rates on the
once you’ve registered, HM Revenue & Customs will issue you with a 10
digit number called your unique tax reference (UTR). This is different to
your NI number and is only issued to those who are self-employed.
WHEN Do I pAy THE TAx?
You’ll have to pay the tax on the year ending 5 April by the following
31 January. So that’s almost a full ten months of holding the taxman’s
money in your bank account – remember not to spend it (see above).
You also have to
by the 31 January
(or by 31 october if you use a paper form). In your second year of self-
employment, the taxman will collect tax on 31 July and 31 January.
.
Are you thinking about working
towards setting up your own
business and becoming self-
employed? Accountant
russell
Smith
guides you through the
process.
Read the full version this article at