Below are the most common questions we have been asked regarding tax and accountancy. If you cannot find the answer you are looking for, please click here to contact us directly.

This is the faq section for Photographers

• I have been told that to reduce my tax bill I can pay my spouse for assisting me. Is this possible? How much can I pay them?

  Paying your spouse or partner is possible but rules apply. Where a spouse or partner has little or no other income there may be tax advantages in paying them for their assistance in running the business.

  This is fairly common practice, but the spouse or partner has to be treated in exactly the same way as you would any other person working for you. The wages have to be for actual work done; the wages have to be physically paid and the rate of pay must match the duties performed.

  In order to justify any such payments, it may help to create a job specification first. Simply list the tasks that are involved, making appointments, doing the bookkeeping, arranging tests etc. Then you need to establish the market rate for such a job. How much would you have to pay someone else to do these tasks for you? Keep a simple diary note of the hours worked per week, then make regular payments that can be tracked, i.e. not cash, for the wages due in relation to the hours worked.

  As mentioned above, you need to pay the going rate for the job. If this exceeds the national insurance lower earnings limit you will need to operate a full payroll scheme, which would need to be registered with HMRC. If you do set up a payroll there may be advantages as your spouse or partner could receive some much needed national insurance credits.

  It is recommended that you speak to your accountant before you make any such payments. 

• I have just started up as a photographer. What expenses can I claim against my tax?

  There are many expenses that can be claimed against taxable income. Everyone runs their business in a different way and they will usually incur some expenditure that is particular to them.

  The following list is not exhaustive but gives an indication of the general expenses that can be claimed by professional photographers:

  • New equipment and equipment hire
  • Equipment repairs
  • Equipment insurance
  • Framing/Mounting/Processing costs
  • Props
  • Public liability insurance
  • Professional subscriptions (e.g. SWPP & BIPP)
  • Advertising/website costs
  • Internet
  • Computer consumables.
  • Postage & stationary.
  • Motor running costs
  • Parking and tolls.
  • Continuing professional education (not initial training costs*).
  • Bank charges on a business account.
  • Telephone/mobile phone charges.
  • Accountancy charges.

  If you have expenses that are not on this list, you may still be able to claim them. Keep a full record of ALL expenses and discuss them with your accountant. They may be tax deductible.

  *Unfortunately the pre-trading trainings costs to become a photographer cannot be claimed against your tax.

• I am worried that my bookkeeping records would not stand up to a tax enquiry. What records should I be keeping?

  You should keep comprehensive records with supporting receipts. Anyone who has undergone a tax enquiry will know that HMRC can spend months looking through your records asking probing questions about your business affairs. This can be both time consuming, stressful and very expensive, not just in terms of tax but in terms of lost lessons due to the time spent dealing with the enquiry. 
  
  It is recommended to have a separate business bank account. If a credit card is preferable, then again, separating business and personal purchases into two separate cards is necessary to avoid queries into personal transactions.

  There are three general forms of transaction to record:

  • Bank transactions, including payments from and deposits into the bank. 
  • Cash payments and receipts 
  • Credit card payments 

  When deciding on how to record these transactions provision should be made to identify which receipts / payments are cash, bank or credit card. 

  For cash receipts, it is important to identify any cash not deposited into the bank but used for sundry cash expenses or general living expenses. 
  
  Personal drawings from the business should also be easily identified. One area HMRC looks at is funding of personal expenses. If you have separate business and private accounts, either make transfers between accounts or write yourself a cheque from the business account.

  Mileage records are also important. Even if you use your car almost exclusively for business some form of record should be kept to validate this. HMRC are keen to challenge business mileage where records are not complete. Given that a high proportion of your mileage will be business related, one method is to record your car's total mileage at the start of your accounting year and only record your private journeys made during the year. At the end of the accounting year, work out the total mileage and deduct the private mileage. The difference is your business miles. If you do not have sufficient evidence to support your business expenses then an enquiry can mean an increased tax bill. 
  
  HMRC may also make similar adjustments to the previous years tax bills, adding interest charges and imposing penalties. Please also bear in mind that bookkeeping records and supporting receipts should be retained for 5 years and 9 months after being submitted to HMRC.