If you regularly make income from your creative work, you have some boring duties you need to do as well as the fun part of splashing paint around or writing poetry – including registering as self-employed. Although the concept of money and forms and the dreaded VAT can seem intimidating and bewildering from the outside (it was to me at least!) it can be broken down into very simple terms. If you ever need any help with it, the UK government website does this very well.
I’ve written below a simplified guide to registering as self-employed for creatives who might want a bit of clarity on the subject. Enjoy!
Terms and Facts
“Working for yourself” means that you work independently, potentially in a freelance or consulting position, without having to answer to anyone or being told what to do by a boss. If you’re working for yourself, you’re classed as a sole trader. This means you are self-employed and have to let HM Revenue and Customs (HMRC) know.
There is a difference between having clients who tell you what to do (self-employed) and having a boss who tells you what to do (employed). Ultimately, if you have the power to make decisions on what you’re working on, that means you’re self-employed.
If you need some more clarity, you’re likely to classed as self-employed if you do one or more of these things:
– Run a business (which is not a limited company)
– Have several customers at the same time
– Have flexible working hours that you decide upon
– Are paid for goods or services you provide
– Make items to sell for profit
You are not classed as self-employed if you occasionally sell the odd unwanted item to make a profit.
Remember you can be both employed and be self-employed at the same time. This will probably refer to most artists’ situations – since often artists will have regular contracted work with an employer to pay the bills, and work on their creativity in their spare time. If you are both employed and self-employed, you still have to register as self-employed and you must factor in both sets of income when you fill in documents such as self-assessment tax forms.
When should I register as self-employed?
You can discover if you should be registered as self-employed or employed using this handy service.
However in general terms, any artist/musician/video maker/writer who is selling work or receiving commissions should be registered as self employed and complete a tax return each year. Please see HMRC’s general guidance regarding working for yourself which you may find useful.
So if you’re registered for paid commission opportunities on Pop My Mind, we’d recommend that you register as self-employed too!
Note: if you’re registered as self employed this does not necessarily mean you will have to pay tax, since tax is dependent on the level of your overall income in the tax year. See our next article about tax and expenses to find out more.
How to register
Registering as self-employed can be done online here, as can competing a tax return. There are special rules applicable to artists therefore it may be a good idea for you to speak to an accountant about it, at least to fully explain the rules.
You might want to note that HMRC can issue penalties for not registering as self employed when you should.
Although a little tedious, this financial administration and knowledge is an essential part of being a professional artist and will help you gain traction in the creative world. I hope this article has helped shed some light on the subject, and don’t miss the next chapter coming soon about how beloved tax relates to all of this!
Written by Karis Lambert