In the UK Income tax is charged on “the profits of a trade, profession or vocation”.
You are assessed as trading and therefore must do a tax return if you exhibit one of the nine badges of trade. But do you know what these are? See the box below for an explanation.
First you need to note that a lot of tax law focuses on "the asset”. However there isn’t a lot of tax case law relating to artists - so what follows is my interpretation.
Please note that I’m NOT a tax accountant and if you need professional advice you should pay a professional!
For what it's worth, in the case of an artist I read “ the asset” as meaning either your stock of equipment and materials used to generate sales (which has a balance sheet value); or your stock of artwork (which has a balance sheet value) which is exhibited and sold over time via exhibitions, online, art fairs or wherever to generate an income.
The nine badges of 'trade'
One of the reasons why HMRC wants to know whether or not you are trading is because it needs to know what sort of tax to apply to your income.
For example, money you receive can be a taxable receipt that can arise in a number of ways. These are:
Below are the Nine Badges of Trade which HMRC have declared to be indications of trade - and my interpretation of how these apply to artists.
Please also remember that at the end of the day what matters is if you generated trading income or intended to trade - NOT how much profit you've made.
The Vanity Gallery is a new page on my website.
I've extracted all the information relating to Vanity Galleries from my Alternative Options for Exhibitions page and created a page which is entirely focused on the characteristics and risks associated with Vanity Galleries.
I have a NEW page for those who want to know more about how to get publicity for:
This Making A Mark Guide provides a CHECKLIST of various action points - plus notes - associated with:
As such it also covers
I'm currently building a web page about art inventory management and software.
Please leave a comment if have any experiences you care to share about:
Alternatively if you've done a review I'd love to know where I can find this (URL etc)
The Software under review includes: the following - and you can see screenshots of their home pages above.
Cloud based Options:
Any others you know of and/or would recommend?
My article in the September edition of The Artist magazine (in the UK) is all about how to Be business-like with expenses and tax.
It contains lots of brief tips about how to make your tax affairs easier to manage and avoid problems with the Inland Revenue. Headings include:
The tips are all one side of A4 making them very easy to file!
This edition is still on sale in all good newsagents in the UK but is also available as a back issue and is also available online as a digital subscription.
About Business News for Artists
To become a successful artist you need to get on top of the business side of being an artist.
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Katherine Tyrrell writes about art, artists and the art business and has followers all over the world. She also delivers workshops for art organisations and reviews websites and career strategies for artists.
Art Business Blogs
This website provides a compendium of resources about the art business for artists.
It helps artists learn how to do better at being business-like, marketing and selling art and looking after their financial security.
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