Category: Business Expenses

Tax Tips for Artists - a talk at Heatherley School of Art

20/2/2018

I'll be giving a talk on Tax Tips for Artists on 5th March 2018 at 4.30pm, in my capacity of Visiting Lecturer at The Heatherley School of Art,

The talk is FREE but my talks tend to get a lot of students and artists attending so it very much works on the basis of first there gets a seat!

The talk is for all those who want to get on top of their tax affairs before any omissions or errors catch up with them!

why - and when - you need to register for tax
why being a hobby artist is different from an artist who MUST do a business tax return
the difference between a personal tax return and a business tax return
timescales for getting on top of your tax
records you need to keep
what you need to declare
what you can and can't claim as expenses and allowances against tax
how to pay your tax
one thing you MUST know about VAT!

This page tells you where Heatherley's is and how to get to it by car and public transport.

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Keep Calm and do your Tax Return NOW!

22/1/2018

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If you are a self-employed artist living in the UK and earning income from your art, this is a little REMINDER that The deadline for paying tax for the 2016-17 tax year is 31 January 2018.

If you haven't yet started - or completed - your tax return then now is a good time to find that file with all your invoices and tax receipts and get stuck in!

That's because the fines for late filing of your tax return AND payment of any tax owing kick in after 31 January.

Estimate your penalty for Self Assessment tax returns more than 3 months late, and late payments.
HMRC

Plus you don't want to get caught up in the meltdown of submission which always seems to happen at the end of January when all those who left it to the last minute start to wail when it's difficult to log in to the system and file your tax return and pay any tax owing.

Or maybe HMRC have fixed that?

TOP 5 Tax FAQs

These are the TOP FIVE most frequent questions which get asked about tax this month

Do I need to fill in a tax return?

Check if you need to fill in a Self Assessment tax return

How do I know how much tax I owe?

NO NEED TO WORRY! When you fill in a tax return online, it automatically works out and displays how much tax and Class 4 National Insurance contributions you owe. It will also allow you to print your calculation.

How do I register to send my return online?

I’ve lost my User ID and password, what do I do?

Watch the HMRC YouTube tutorial below to find out:

When does my 2016/17 return need to be completed?

Your online Self Assessment tax return needs to be in by 31 January 2018, otherwise you will receive a £100 fine.

Which brings us back to where I started!

Tax Tips for Artists

If you need any more help, you can try looking at my page on Tax Tips for Artists . I can't promise it has the answer to every question but it will probably steer you in the right direction. (Please note I do NOT offer advice to individuals and information is offered without any liability.)

I'm going to be updating this page in the near future while preparing my Tax Tips for Artists talk on 5th March 2018 for The Heatherley School of Art in Chelsea - which is free to anybody who wants to come (but there is limited seating!)

Finally here are some of my past blog posts on the topic of tax

Ten Tax Tips for Artists - some of which are reminders for me! Plus some links to guidance on what to do and what not to do!
Ten More Tax Tips for Artists - Round about this time of year - just as I'm submitting my tax return to Her Majesty's Revenue & Customs, I write a blog post about tax - for artists.
Do Hobby Artists need to complete tax returns - reasons why people who are not full time professional artists living in the UK might need to complete a tax return.

You can also find more GENERIC help on the HMRC YouTube Channel.

Here's their Self Assessment Video about the weakest excuses and worst expenses they've had from taxpayers!

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Why more artists need to study business

18/9/2017

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Paying for health care and business insurance, saving for retirement and recovering from disasters can be tough to handle for artists without traditional jobs

'The Moneylender and his Wife' by Quentin Massys (1456-1530)

Smart Art: Why More Artists Need to Study Business is an article and a 20 minute podcast (RECOMMENDED). This post provides a quick briefing on what it's about.

They both focus on why artists need to be more than just talented artists in order to succeed and survive in the art world and what they need to know and do.
All quotations are from the article unless otherwise stated.

Traditionally, the artist was seen as this type of person who was aloof or being unaware of the real world. It gave them some X-factor. But not anymore, because there are more than 2 million artists in the U.S., and they have to survive somehow. According to data, we know that only 40% of them will remain as working artists within five years, and only 10% of them will persist in the long run.
Gizen Saka

The participants are:

Jenifer Simon, director of programs and outreach at CERF+ - a nonprofit that helps provide artists with a financial safety net, and also helps people needing emergency relief and being prepared for meeting an emergency
Gizem Saka, an artist who is also a senior lecturer at Wharton Business School.

CERF+ is committed to helping artists build resilient careers through sustainable business practices that can contribute to the likelihood of rebounding from setbacks, whether due to minor mishaps or major emergencies.
CERF+ - Craft a Career

Key points include:

every art school should have a business class for their students
artists need insurance otherwise a setback might mean their career ends with a nasty accident which destroys their artwork, art materials or studio.
artists MUST have public liability insurance for any interaction with the public by them or their artwork in a gallery or other location.
studio safety is critical - artists need to be well informed about the space they are going to be inhabiting (see
artists need to consider risk management - how to manage risk and identify what they can least afford to lose. What is the most critical event that could affect your ability to make art and how likely is it to happen?

Ghost Ship - Site of a fire on December 2, 2016 that killed 36 people in an artists' collective housed in a warehouse in Oakland, California

Artists need to know:

what their hidden costs related to business expenses are
whether or not their studio use at home is covered under their normal residential home insurance policy
how to avoid injury - and become unable to make art - due to repetitive strain injuries
how to find affordable places to work and be safe
why artist communities are so essential to helping each other out in an emergency
why financial plans are essential to developing an art business or a business related to art.
how to be a savvy artist when it comes to getting funding and making a living from their art or interest in art.

and finally......

My response to the first comment on this article from Luis G. Renart, Emeritus Professor of Marketing, IESE Business School, University of Navarra, Barcelona, Spain is my 2013 post Picasso the businessman - branding and the value of art a.k.a. this man doesn't understand what an astute business man Picasso was!

REFERENCE:

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Want to set up an online art gallery with ecommerce?

28/4/2017

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I got an email this morning asking questions about the tax aspects of setting up an online art gallery and ecommerce which involved artists and paying customers who might be located anywhere in the world

Below you can read:

the email I got and the "short sharp" response I sent below.
a checklist for anybody thinking about setting up an ecommerce facility to sell art

What are the tax implications of selling art online?

This is the email. I've numbered the questions to make them more accessible online in a blog post

Dear Katherine,

Firstly, I owe you my sincerest gratitude for all the information you have presented on this website. It has answered many questions I had and for that I am grateful.

I am on the verge of launching an e-commerce online gallery and I was hoping you could answer a few questions for me. This my first time dealing with anything to do with e-commerce and selling online so there is still a lot I don’t understand.

1) Some of the artists who I represent do not reside within the UK or the EU, and there is no guarantee that any paying customer would reside within the UK or EU either. How would this affect me regarding tax?

2) When this business takes off, I plan on becoming location independent. How will this affect my tax status as I won’t be living within the UK but my business will be registered in Britain?

3) How would it work when it comes to putting an address on my invoice if I’m only in the same location for a limited amount of time?

Thank you again,
Kind regards,

Mr Gallery Man ( a pseudonym)

It generated a very "to the point" response from me!

Dear Mr Gallery Man

If you are setting up a business you need professional (i.e. paid) tax advice from an expert to make sure that:
- you are aware of all your legal responsibilities tax wise
- where you live and where you operate are tax efficient given who you expect your customers to be
- you get to keep your house because the tax man doesn't come looking for the tax that you have avoided - with penalties and a possible prison sentence
This is serious. You need proper advice. That's not going to come from me.

The next point I'd make is that I have seen any number of people have the bright idea of setting up an online art gallery operating through ecommerce in the last 10 years. I'd say round about 95-99% of them no longer exist.

I think you need to do more research about the marketplace and what sort of investment you need to make in time and effort - and contacts / social media following - to make it work.

My one piece of advice for you is if you have never run a business before and if you have never been involved in the art market before, run away fast before you waste an awful lot of money for no return.

Regards

CHECKLIST:
How not to get stung when setting up ecommerce!

Do thorough research first. You should never be starting any business where you don't fully understand the full implications. Those that do go out of business very fast. How anybody could be contemplating starting an ecommerce business without what understanding what they are getting into is beyond me!
Get professional tax advice if you plan to set up a business. You're an amateur. You haven't got a clue what you don't know about tax. Tax experts exist for a reason. Paying for tax advice is a legitimate business expense which is deductible against tax - so long and only if it is related to the business and not your personal income. If you can't afford the tax advice you definitely can't afford to set up in business involving ecommerce.
Understand the competition - you need to research and understand the business model adopted by your competitors. Those who are still in business after few years either know what they're doing, have good advisers, are prepared to keep going even if they're not making much money - and/ir the tax man has not yet caught up with them. Take a look at how where they are located and how they deal with local taxes on transactions for people living in different countries. Don't assume that what they are doing is correct, however it gives you a basis for an intelligent discussion with a tax expert!
There is no escaping tax liability - make sure you don't get landed with an enormous tax bill! - Governments have woken up to the fact that they are losing out massively on tax revenues through the amount of business which is now transacted online. Tax authorities are now paying a lot more attention to online businesses. You should assume that anything you are doing which evades payment of tax (whether deliberate or inadvertent) will result in a tax bill plus penalties plus a possible prison sentence. They are getting very serious about this.
Understand the differences in tax treatment of private sales vs sales via art dealers and galleries. What quite a few people don't understand is that private sales - between an sole trader artist and a paying customer are very different from sales via third parties. There's also a difference between a third party which hosts a site that enables artists to make contact with paying customers and those where the artist is represented by a gallery and sells art via the dealer/gallery online. The differences largely relate to thresholds for payments of additional taxes; liability for additional taxes unrelated to thresholds and whether they way the ecommerce is configured is deemed to be an evasion of tax.
Understand why Tax gets much more complicated when transactions are online. You have to make sure you observe the tax regime for where you live, where your business is located - and also where your paying customer lives. For example, with respect to the pursuit of lost income from tax on online transactions for digital services, the EU changed the treatment for all digital transactions in 2015. Now VAT is payable based on the place where the customer lives NOT where the artist or the business is located - and there is no minimum threshold for registration in another country (a total nightmare!). They're also not at all keen on people trying to get round this by saying they won't do business with anybody outside the country where they live - and were threatening penalties for this last time I read up on this!

EU VAT rule change
From 1 January 2015, the rules around the European Union (EU) VAT place of supply of services will change. This will affect the sales of digital services (broadcasting, telecommunications and e-services) from a business to a consumer (private individuals and non-business entities for example, public authorities or charitable bodies). The place of taxation will be determined by the location of the consumer.
VAT: businesses supplying digital services to private consumers

Bottom line, if you are

operating as a sole trader as an artist or art tutor involving ecommerce
or you are hosting an online gallery with ecommerce facilities for selling art for artists you represent and/or other artists,

you need to be very careful that you have sought professional advice and checked out all relevant tax aspects for your particular set-up - which you have explained very clearly to your tax adviser. (NB Only telling them what you think is relevant isn't a helpful approach since you don't know what you don' know!)

Just because somebody says they operate in a particular way doesn't make that right or legal - unless they can produce the letter from their tax advisors explaining what they can and cannot do!

BTW I'm NOT a professional tax expert. You should make sure you also read the note below about what this site does not do.

You can learn a lot from authoritative tax sites online - but they don't have all the answers!

More information about tax and vat for artists

You can read more information on this website on the following pages in the Money and Tax section

Tax Tips for Artists
VAT for Artists

The information I collect, collate and organise on this website largely relates to information accessible to anybody from authoritative sites - either formal government tax authorities or professional tax advisers. Plus some common sense advice from me about how to organise your tax affairs.

What this site does not do

This site does NOT provide:

Definitive answers on all matters relating to tax records for where you live.
"Professional advice" available from somebody with a tax qualification and current expertise of tax affairs anywhere in the world.

I recommend that you pay a professional for tax advice IF:

your tax affairs are complicated
you have a specific tax query which you can't find an answer to from official information available online.

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Don't be conned by SEO companies!

3/2/2017

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I regularly get approaches from people representing SEO companies who promise that they can help improve the performance of my website.

I normally send them straight to the spam folder. However they're sneaky and use forms on your website.

This is one such - which came in via a form response on Art Business Info for Artists this morning

Name
Alan Sehwag
Email
[email protected]

Comment
Hi there,

I recently spent some time doing a site review of www.artbusinessinfo.com. (Yes, I do random site reviews for a living.)

Based on what I saw,there are a few things you could implement pretty quickly that would help boost your Google rankings, traffic, social media & conversion. I noticed, few technical errors that are effecting your website’s performance too.

We'll start counting & will keep fixing all bugs, provide you a clean safe website.We are also into website design, development and can redesign your website.

Not sure what your initiatives are in this area, but is this something that’s on your radar?

Alan.
(323) 617-3981

This is the reply I've just sent to Alan.

Dear Alan

I'm assuming this is for free and that your pricing page http://www.ngrwebteam.com/seo-pricing didn't just slip your mind - or the Federal Regulations relating to spamming people who have not given their consent to be approached? You sure you don't want me to remind you?

I also do reviews of those that say they help artists. I'll be sure to remember the name of your company.

Regards
Katherine

Katherine Tyrrell
Making A Mark on Art

Making A Mark is a top art blog - #3 in the UK and #7 in the world
c. 3.8 million+ visitors and 10.5 million+ pageviews and counting.....
Follow Making A Mark on Facebook | Twitter | YouTube | Amazon
My Book on Facebook: Katherine Tyrrell: 365 Tips for Drawing and Sketching
Website: Art Business - for Artists + Blog + Facebook Page
Website: Botanical Art & Artists + Blog + Facebook Page

If you get approaches like this:

You shouldn't be. This is spam. It also breaches the rules of marketing online.
They typically all say the same generic things irrespective of what the issues are with your website. That's because they are selling their services to make money for themselves.
They typically haven't got a clue about the target market for your website. They are selling cookie cutter solutions - not something specific to marketing art by artists.
Check the website to find the pricing page. Alan forgot to mention that help from his company STARTS at $400 per month! The more difficult it is to find the pricing the more suspicious you should get. That includes any omission to mention prices in any approach to you.

The enormous prices for services from NGR

You most certainly don't need to be spending a lot of money. Most artists simply don't need help from professional companies if they are prepared to learn the basics for themselves. It's not difficult.

Personally I'd recommend avoiding SEO companies who in my book are the equivalent of snake oil salesmen!

Try and see how far you can get on your own through studying the basics of what helps with marketing your art online. Unless you've got a BIG pot of money to sink into creating a brand and marketing it and expert who gets results for ARTISTS!

One simple way to improve your website performance

I've always found the Google Webmaster Guidelines is a good place to start because you need to ensure your website is compliant with Google if you are to get a good ranking and turn up in search enquiries.

Work your way through these before you ever contemplate looking around for more help.

What's your best tip for fellow artists?

Please share your best tip for improving the performance of your website.

Mine relates to being very careful how you title pages and construct URLs for individual pages on your website.

be aware of the keywords associated with search queries
be very accurate as to content (Google likes this!)
try not to be the same as everybody else!

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Art Business Info: NEWS

Tax Tips for Artists - a talk at Heatherley School of Art

Keep Calm and do your Tax Return NOW!

TOP 5 Tax FAQs

Tax Tips for Artists

Why more artists need to study business

Want to set up an online art gallery with ecommerce?

What are the tax implications of selling art online?

CHECKLIST:
How not to get stung when setting up ecommerce!

More information about tax and vat for artists

What this site does not do

Don't be conned by SEO companies!

One simple way to improve your website performance

What's your best tip for fellow artists?

Art Business Info. News for Artists

Visitors so far

GET Art Business Info. NEWS by Email

Author

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Art Business Info: NEWS

Tax Tips for Artists - a talk at Heatherley School of Art

Keep Calm and do your Tax Return NOW!

TOP 5 Tax FAQs

Tax Tips for Artists

Why more artists need to study business

Want to set up an online art gallery with ecommerce?

What are the tax implications of selling art online?​

CHECKLIST: ​How not to get stung when setting up ecommerce!​

More information about tax and vat for artists​

What this site does not do

Don't be conned by SEO companies!

One simple way to improve your website performance

What's your best tip for fellow artists?

Art Business Info. News for Artists

Visitors so far

GET Art Business Info. NEWS by Email

Author

Archives

Categories

What are the tax implications of selling art online?

CHECKLIST:
How not to get stung when setting up ecommerce!

More information about tax and vat for artists