There's only one way to get on top of your tax affairs and that's to identify and address your weaknesses
- or pay somebody to do it for you. 

This site is for those who think they can do better at tax - and aren't yet ready to pay somebody else to do their tax return. ​

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Information and advice about tax for artists
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Does tax frighten you? 

Are 'creating art' and 'completing a tax return' two activities which you regard as totally incompatible?

Take a look at this page if you're an artist who'd like to try do better in relation to:

• what you need to declare
• what you can claim
• what returns you need to make, 
• the tax you need to pay and 
• what records you need to keep. 

OTHER DEDICATED COUNTRY PAGES now provide links to formal information and advice about:

• Tax on art awards and prize money - in the UK, Ireland, Germany and the USA
• UK: Tax for Artists - including links to formal advice from HM Revenue & Customs in the UK
• VAT for Artists - re. UK
• USA: Tax for Artists - including links to formal advice from the IRS in the USA.
• Ireland: Tax for Artists 
• Australia: Tax for Artists ​- including relevant links to the Australian taxation Office

These pages look at:

• when is your art a business rather than a hobby
• what are the badges of trade or indicators of trading
• what happens when your art is a secondary source of income
• what professional receipts counts as taxable income - and why
• what business expenses you can claim for your art business
• what additional allowances are available for artists
• where you can find the official information in tax offices

Plus Tax TIPS from:

• me - compiled from practical experience and questions I've asked over the years
• various people who have written about tax tips for artists online

Plus Top Tax Blogs - with accessible good advice from authoritative experts

Plus Videos by bona fide experts

This website is read by people all over the world so I'm sticking to the simpler principles which help artists to cope with their tax returns and maximising their allowable expenses

NOT on this site
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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 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.

Tax Tips - by artists - for artists
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the taxman will class you as a business if it can prove you are doing “anything in the nature of trade”
The Telegraph - ​HMRC targets Etsy, eBay and Gumtree sellers – but when is your hobby taxable?

In summary, my top tax tips for artists are:

PRINCIPLES

• Hobby income is still income and can still be taxable - know what the rules are and what you need to declare
• know the "badges of trade" - the indicators that tax people use to make a distinction between when a hobby has become a business
• Log your income and expenditure as you go

Summary of Nine Badges of Trade as per HM Revenue & Customs - you only need one to be designated as trading!

SPREADSHEET SKILLS

• Learn how to use a spreadsheet
• Use a summary worksheet page

ORGANISATION

• Have an organised folder system for different tax years
• create a filter to automate the labeling of all emails related to tax
• File all paperwork as it is generated
• Do not leave your paperwork to the year end. 
  
• Do your paperwork on a regular basis - dictated by how much you generate
  

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EXPENSES

• File all invoices as you generate them (I keep both paper and digital files)
• Fill all expenses receipts as you get them (I also scan/photograph receipts for a digital file)
• Keep a note of all business journeys
• Record the exchange rate as at specific dates for international income and expenses
• Always aim to make a profit if you want to claim expenses​

ACCOUNTS

• Use short-form accounts in the UK if you are not making lots of money
• Learn the difference between income/expenditure and receipts/payments
• Learn about tax allowances - and how to account for them​

BANKING

• Keep a separate bank account for business receipts and payments
• Set up a savings account for funds set aside to pay tax
• Make sure you have funds available to pay the tax due on time

TAX RETURN

• Never ever EVADE paying tax - you can be subject to fines and/or a prison sentence
• Tell tax people when you become self-employed
• Register to use the online self-assessment system
• Avoid financial penalties - get your submission in on time and pay your tax on time
• Avoid financial penalties - pay tax on all relevant income, including all overseas income, on time
• Understand what a UTR is
• Understand the difference between local taxes and national taxes
• Create a dedicated savings fund for your tax payments

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TRICKY ASPECTS

• Foreign Income - treatment tends to vary relating to whether generated via self-employment or investment
• Prize Money - see Tax on Prize Money
• Bartering - still involves tax
• VAT - see VAT for artists

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I've often come across artists who tell me they're not good at book-keeping or keeping track of their records of income and expenditure for tax purposes.

I vividly remember one evening spent trying to help a friend who was a master silversmith get his accounts together and being faced by his shoeboxes full of invoices and receipts.......
Art Business: Taxes and bookkeeping for artists

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My article in 'The Artist' Magazine (September 2016)

This is a round-up of the websites, blog posts and articles about tax which have been written with artists in mind.

I've written various blog posts covering:

• common tax issues and tips for how to address
• when hobby artists need to complete tax returns.
• why you need to avoid potential penalties if you fail to declare your second income from art
• tax aspects of setting up eCommerce arrangements for customers from other countries
  

REFERENCE: T​hese are:

• Ten Tax Tips for Artists - Here's Ten Tax Tips for Artists - some of which are reminders for me this time next year! 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
• Does your Art create. Second Income? - about the penalties being faced by those who fail to declare their second income for taxation purposes
• How to keep on the right side of the tax man - about my article in the September 2016 edition of The Artist
• Want to set up an online art gallery with ecommerce? - 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

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Blogging about Tax

Art Business Info - News about art for Artists
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In this section I'm listing the blog posts I've written which cover tax matters.

Just in case you know you read it on the blog but now can't find it again!

• Tax Tips for Artists - in the UK, USA, Ireland & Australia
• The bonus if you're selling art - but not a lot!- about the tax free allowance for hobby income.
• ​Keep Calm and do your Tax Return NOW! - includes the top 5 Tax FAQs
• Want to set up an online art gallery with ecommerce? - there are tax implications. Includes a checklist for how not to find yourself in trouble given tax authorities now pay a lot more attention to online businesses.
• Income Tax: The nine badges of trade - ​You are assessed as trading and MUST do a tax return if you exhibit one of the nine badges of trade. 
• Free Self-employment Webinars by HMRC
• How to keep on the right side of the tax man
• How best to generate tax payments to HMRC
• HMRC Webinar: Simpler Income Tax for the Self Employed (UK only)
• Tax Tip: Travel expenses for artists
• Keep calm - and do your tax return!
• Tax return 2014/15 - the deadline approaches

Top Tax Blogs

These are tax blogs written by people professionally qualified to comment on tax - who provide accessible advice written for the small business person.

• Barbara Weltman - Big Ideas for Small Business Blog - Called “the guru of small business taxes” by The Wall Street Journal,. She provides a complete source for tax, legal, and financial information specially developed for small businesses and independent entrepreneurs - written by a well-respected attorney and author. Named a Top 100 Small Business Influencer from 2011 to 2015.”  This is a link to past blog posts about Taxes
  

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More tips about tax 
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I've categorised the links by the type of person offering the advice

By art business bods

• Tax returns for artists by Sarah Preece | Artquest - Sarah Preece, Executive Director at BAC and founder of Making Space, suggests a step by step approach to filling in your tax return 
• Taxation of Prizes and Grants | Artquest - Leading judgments of the courts in relation to the taxing of prizes orgrants in recent years have amplified and clarified the basic statutory position.
• Becoming self employed By: Russell Smith | a-n The Artists Information Company
  For many artists and arts organisers self employment is the best option of receiving income, giving freedom to choose work, better work-life balance and tax savings. This guide by Russell Smith explains what you need to know about becoming self emplo
• Tax for Artists | Plus 10 Top Tax Saving Tips for Artists That Will Save You MONEY
  What do you do about Tax when you are starting to sell your artwork? A chartered accountant explains all
• Bartering Art - How to Do It Right | Trades, Exchanges, Taxes and More | Artbusiness.com - Even though no cash changes hands between the artist and the store, appropriate state, local, and federal taxes must still be paid (on this as well as on any barter transaction). 

By Tax Advisers (UK)

• Tax on self-employment income while remaining employed Highlights the differences in the tax system between running a business and just having some extra casual income.

Minding Your Business: A Guide to Money and Taxes for Creative Professionals
​by Martin Kamenski

This book focuses on communicating in plain English rather than "accountant speak" despite the fact the author is a fully qualified and practising certified accountant.

This is his fine-tuned explanation of how to deal with what's needed for your tax affairs if you are a creative person

Paperback: 128 pages
Publisher: Hal Leonard Books
Publication Date: December 1, 2012

RECOMMENDED: Rated an average of 4.4 out of 5 stars on Amazon.com by 5 reviewers - there are some very complimentary reviews!

BUY THIS BOOK

Minding Your Business: A Guide to Money and Taxes for Creative Professionals from Amazon.com

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What aspect of tax puzzles you?

It's useful for me to know what questions you want answers to. Ask Away - using the contact form. 

Issues raised will ONLY  inform the future development of this section of the website and my blog posts. 

PLEASE NOTE:

• Your question will not be published.
• Your question will not be answered (see near the top of the page for the reasons why not).

Specifically I do NOT answer questions posed by individuals in relation to

• the completion of forms
• or what is the most appropriate way to report income
• or anything about details relevant to their individual circumstances

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DISCLAIMER

• I'm not a professionally qualified expert in this area.
• However everybody has to start somewhere and the aim of this website is to get you thinking about the right questions to think about and ask if and when you need to get professional advice.
• The links contained on this website are those which could be found by anybody doing extensive research on the Internet. This is your shortcut to the hours it took me to put this site together!

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