Additional income - but do I need to set up a business?

princess_sarah_2

Hello!

I am thinking about setting up a portrait painting service over the internet, in order to get a bit more money while studying.

People would be able to place an order through a website, submitting a good photo of the person they want a portrait of. I would digitally paint the portrait and send it back to them. It can be quite expensive to safely transport paint and canvas portraits to their destination - these savings could be passed on directly to the customer. They would be free to print the image out to their exact size and quality specifications in a professional printing shop, and could do so as many times as they wanted.

But what are the business and tax implications for something like this? I don't expect to get that many commissions, but would I need to register a business for tax purposes? Income would probably not be in a cash form, it would probably be to bank account or paypal.

Thanks in advance

Savvy_Sue

Yes, you would need to register as self-employed: look at the HMRC website and phone them: they are usually very helpful.

doesn't matter how the money gets to you, it's income, and as such has to be declared to HMRC. Once you earn more than your annual personal allowance, you have to pay tax. There's also National Insurance, but you might be able to get a small earnings exemption initially.

Might be worth having a look on the Small Biz board for a bit more advice, even if this is small scale. The thing I'd be concerned about is making sure you get paid even if they don't like your work ... or say they don't like it!