So this one is very dry and long-winded but very informative. It’s all about self-employment and the benefits you could get in the UK.
Self employment is not the same as a 0 hours contract and you get to work in the field you are trained for, have the freedom to decide your own hours, ways of working and have the flexibility to also have a part time job to financially sustain yourself (this is often the norm).
About portfolio careers:
- you can pay less tax by claiming the cost of self employment against PAYE earninsg
- Approxiately 1 in 7 people are self employed
- 30% of creative graduates are self employed within the first 5 years of graduating
- Expect the first year to be a financial struggle
The benefit system of self employment:
Regarding tax: if you have a part time job you’d normally get a pay slip (PAYE is the tax on that slip) but if you’re self employed you’re in charge of making sure you pay the taxes. If you’re self-employed with a creative part time job it is likely you will spend more than you earn for the first few years. If this is the case there is a box you can tick that allows you to get some of your money back on tax forms as long as you explain how it is that you’re earning your money (becaue you are only taxed after the business expensives are accounted for).
More ways of making money through your creative skills are:
- Selling your work
- Selling your skills – teaching, being a technitian, writing guides/tutorials
- Educating and training – workshops are a regular reliable source of income
- Competitions and awards
It is possible to get grants from the Arts Council to fund some of your projects or thinks like workshops and classes. Places that are a low income poverty area are the most likely to get the funding and young people (especially from disadvantaged backgrounds) are the most common target group. The minimum you have to apply for is 1000 pounds and you do not necessarily need a massive amount of experience with things like running workshops in order to get the grants (although obviously it helps). If you get the grant you need to supply 10% of it in kind – some ways of suppling it are through means such as advertising, Sainsbury’s vouchers, and crowdsourcing. Indiegogo is basically an art version of Kickstarter. Do your research before pitching a project look at what projects have been successful on Indiegogo and what these projects have offered their backers. Always have something you can send out to someone who is intersted in your work at any given moment – sometimes these people could be people who can offer you some great opportunities. Treat applications to funding as they are a first draft of an essay – expect critisisms and know there is a high chance of rejection. Approximately only 1 in 5 applications are successful so don’t take it personally and try not to let it put you off applying again or for other things.
Benefits you can claim:
- Job seekers allowance (you can still sign up for this if you want to be self-employed)
- Working tax credit
- Housing benefit
- Council tax reduction scheme
- New enterprise allowance
This may change soon because of the upcoming Universal Credit where there is a benefit cap. Currently as it stands if you are self-employed and are not earning enough to live on you need to go to the job center and emphasise that you don’t have enough hours to earn money (under 16 hours a week). If you estimate to be working over that then the Working Tax Credit is an option (approximaately over 30 hours per week), just read the rules before applying and note that you may need to meet certain conditions to qualify for it.
The New Enterprise is basically a grant that gives extra money to the newly self-enployed – in some areas this will be on top of other benefits and in others it won’t be so check before signing up to make sure you don’t end up getting less money because of it. You will need to produce a business plan (it needs to be specific but there is also room for lots of guesswork) and you will have a monitor. You can 1200 pounds over 6 months with this.
Where to work – there are three main options:
- At home. This can be isolating and not very motivating. You should have a space in the house or shed solely used for business so a council person can come around to assess it for business rates (although this only tends to happen if you have disgruntled neighbours) and it good to declare this on your insurance.. If you have a shed there are different rules and specifications for it.
- Studio groups. These are great for graduates to get to know other artists and there are often events involving talks and exhibitions.
- Private rented studio. You often can get good cheap deals for a large space but it is not the landlord’s job to tell you what the business rate for it is. If the space is over a certain size then it has a rateable value – if the space is under this size you can get relief from the council. You mostly don’t have to worry about this for years unless you have a huge space all to yourself (an enitre floor, for example) or unless you’re in the middle of a city centre.
- You need to register as self-employed
- You need to keep records of your income and expenditure
- Once a yearyou have to send a HMRC form – a self assessment tax return
- You need to pay what tax you owe – both income tax and national insurance
- You do not legally need an accountant and solicitor
- You have to keep your records for six years. It is advisable to keep them all your reciepts in a folder and separate them month by month. There are also free packages online for accounting
- Register with HM Revenue and Customs as soon as you start trading with the intention of making a profit. The latest you much register for tax is before the 5th of October. This form is on the gov website and it may be called the ‘sole trader’ form rather than the ‘self-employed’ form.
- You do not need to have a separate business bank account but it is advissable that you have two different personal accounts
- You will need to submit the new annual tax return and self-assessment and digital quarterly returns that are being introduced in July 2018
You can claim for:
- Business – including materials, train fares (including visiting exhibitions)
- Capital items – such as a van, computers and so on – evevn if you already own them
- Costs of working from home – a proportion of the bills, flat rate and so on
- Travelling costs
- Petty cash vouchers eg/ for second hand items, paper you’ve had to use to make your own reciept
You pay your tax in advance two times a year and estimate the HMRC you can be charged and can save around 30% a year
- AA2A Artist booklet online contains links to loads of websites
- Chainlinks – a local Chester Arts newsletter
- Indiegogo – an art version of Kickstarter
- A-N – this is an artist’s database for networking, job adverts and so on. It costs 36 pounds a year but this includes insurance
- Axis Web – for professional profiling. This also has good insurance deals included in the membership
- DACS – this has lots of information about payback and copyright informatin for artists. Copyright lawyers are very expensive and companies often rely on you not being able to afford them
- Eye The Prize – a networking site. Sign up for newsletters so you’re less likely to miss out on opportunities
- ArtQuest – a copyright and exhibition information site
- Advileguide – benefits and tax information for the self-employed
- The Price’s Trust – support and grants for creatives
- The Start-Up Donut – resources for businesses and self-help
- Brightboole – a free online accounting package