Taking Care of Your Art Business – Self-Employment
It is very difficult for a passionate artist to imagine working under anyone who requires their output to fit to specific designs or protocols. Every artist is unique in their talent, genre and technique, and therefore self-employment is a particularly attractive option for those looking to put their work on the market, as it affords the critical ability for complete self-expression in an environment where the only rules and restrictions are one’s own. Figures from the Office of National Statistics show that if you choose the path of self-employment, you will be far from alone. During 2014, the number of people registered as self-employed in the UK hit its highest level in 40 years – reaching 4.6 million.
About Self-Employment - What does it mean?
According to the UK Government, you are self-employed if you:
- run a business for yourself, and take responsibility for its success or failure
- can decide how, where and when you do your work
- provide the main items of equipment to do your work
- charge an agreed fixed price for your work
- sell goods or services to make a profit
Basically, self-employment means that you work for yourself rather than a company and you are responsible for paying your own income tax. Once a year you will receive a reminder from HMRC to submit your tax return which is otherwise known as self assessment. The self assessment can be completed online once you are register to use the online services, which can take a few weeks. With your Self Assessment you have to declare earnings from any work you do within that given tax year. If you fail to submit your tax return HMRC will charge a penalty.
Are you ready to be your own boss? – The Advantages of Self-Employment
Self-employment will afford you limitless freedom and flexibility to work to your own schedule. You will have the power to set your own deadlines, thus ensuring your work is given adequate attention and that no corners are cut to please others. The ultimate result is that you will have the liberty to complete your work to the highest possible standard that satisfies your customers as well as yourself.
As your own boss you will have control over every conceivable aspect of your business, from maintaining a healthy work-life balance to ordering equipment which best suits your own individual needs. You never need rely on using lower-quality, standard equipment bought in bulk to the office to save on costs. So long as you organise your schedule effectively, you will never need to become overworked or be required to rush through projects to meet deadlines.
Self-employment will also grant you total control over pricing and finances. You know the worth of your own work, and if it is agreeable to your customers, so will they. You will be able to experience the satisfaction of earning what you feel is an appropriate wage for the quality of your work and the time needed to complete it. You will also know straight away how much money is coming in and how much is going out, therefore licensing you to plan your own financial future.
One of the main advantage of being self-employed is that you can reduce the amount of tax you pay. You only pay tax on your net profits – income less business expense and personal tax allowance. The more deductions you have to offset against your profits, the smaller your profits will be, and the smaller your tax bill. Your personal tax free allowance for the tax year ending 5th April 2016 is £10,500.
How to Become Self-Employed
Before anything else, you need to ensure you are able to give self-employment an adequate amount of your time! To make the most of the opportunity, it is advisable to consider your current employment status, make necessary arrangements and organise your other commitments appropriately. In order to comply with UK law, you will need to register yourself as self-employed with Her Majesty’s Revenue and Customs (HMRC), in order to ensure that you pay the correct amount of Income Tax and National Insurance contributions. You can do this online by visiting the HMRC website. You will also need to ensure you are familiar with basic accounting procedures in order to keep itemised records of all your financial affairs – this will be vital when self-assessing your state contributions, and helpful for you when calculating your annual income and making decisions!
More information is available via the Citizens Advice Bureau.