Finance and tax advice for writers
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BY HW Fisher
14th Mar 2024
HW Fisher is a top accountancy practice with unparalleled experience advising professionals in the media and entertainment industries. For over 50 years, they have supported authors at different stages of their careers with all their tax needs. In addition to this work, they also provide expert accountancy, audit, tax, corporate, and financial advisory services to high-profile entrepreneurial SMEs, large corporates, and high net-worth individuals.
We're grateful to HW Fisher, they've sponsored scholarship places for under-represented writers on our courses since 2016.
Find out more about HW Fisher and their ongoing sponsorship of scholarship places here.
We gave our writing community the chance to ask the HW Fisher team questions about tax and their financial goals as writers – and we’re pleased to share their answers with you. Whatever stage you're at in your writing career, we hope their insights will help you with your financial planning.
Susanna asked: Is it beneficial to form a business as a writer? If yes, at what point?
If you earn money from writing, you are as a matter of fact a business, and must register self-employed with HMRC. It may be beneficial to register before you start receiving income in order to declare expenditure and claim losses and it may assist future averaging claims.
It may be beneficial to form a company if income will be considerable but it will depend on specific circumstances.
Vicki asked: How do you plan for paying your tax if your income is sporadic? Should you just portion off an amount from each payment made to you?
It is advisable to set aside some money to pay for any potential tax liability. 25% will be sufficient in most circumstances, however it could be too little or too much and so it is advised to keep a close handle on the profit position and make provision accordingly. Early completion of the tax return will provide an early warning of the tax payable by 31 January.
Carlie asked: At what sort of stage of their career would a writer need a specialist accountant? We already have an accountant for our small partnership (we’re builders). Would we end up with two accountants, if I were to be a successful author?
You can have more than one advisor, although it is recommended that you keep all of your tax and accounting affairs with one accountant only or it could get a little messy. HMRC will also speak to one accountant only.
It is however possible to take specialist advice from different advisors but it could get costly.
Rich asked: If you already have a full-time job (UK) and then you get a publication deal and advance, what are your next steps, i.e. what do you have to declare to the government and when?
You need to register self-employed within 6 months of the tax year in which you receive the first advance. After the end of the tax year you need to complete a tax return to report your trading income and relevant expenses along with any other reportable income. The return and any tax liability will be payable by 31 January following the end of the tax year.
Bethany asked: How does averaging relief work for authors? And when in your career would you become eligible?
Profits that vary over consecutive years can be aggregated and evened out over the two years to avoid higher tax rates and/or make use of unused personal allowances. This can be claimed by all individual authors creating their own copyright, except in the first and last years of your professional activity.
John asked: I'm writing a novel (but don't yet have an agent or book deal. Is there anything I can be doing now to help with future taxes?
Keeping good records from the start of your writing career and logging all of your business expenses will allow you to claim them when you do receive a book deal. This means that nothing gets missed.
Julie asked: Can I claim work from home expenses for my writing? (I don't already do this for work because I am a nurse.)
Yes, you can claim rent/mortgage interest, council tax, buildings and contents insurance etc. for a room furnished as an office. Otherwise, these costs and light and heat need to be apportioned based on time spent.
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