Starting weekend business - PAYE tax credits?

adamdynamic

Hey,

I've been trawling the internet for a while now and can't seem to get a straight answer, I'm hoping someone here can help me!

My situation: I have a full-time, PAYE-paying job. Having done wedding and event photography for friends in the past I want to start up as a self-employed photographer on the weekends etc (and still keep my day job).

My initial question is related to tax: I know I would have to register with HMRC as self-employed, to 'professionalise' my operation I will need to upgrade quite a few pieces of equipment. I know that any income would be counted 'on top' of my day job income for tax purposes, is it possible to reclaim the cost of the equipment as a tax credit in the same way? (I'm realistic in that there's a good chance I'll make a loss in my first year).

Secondly, has anyone here got any experience doing this that they can share? Are there any pitfalls I need to look out for? Apart from registering with HMRC, insuring myself and my equipment and sorting out a business bank account, is there anything else on the 'business' side of things I need to be thinking about?

Any help on these would be much appreciated! If you need any more information please feel free to ask!

Thanks,

Adam.

Any advice on this would be appreciated

Premier_2

Photographic equipment sounds like it would be considered capital expenditure. You would need to depreciate this over time and offset the depreciation against gross profits you make to reduce your tax liability.

Pitfalls? Well you say you have done this previously for friends so it sounds like you have experience. However that leads to the question of why you need to immediately upgrade your photographic equipment. Have you done professional standard photography? (in which case why not continue to use that equipment?) or have you just taken a few snapshots at a friend's wedding?

Essentially, what evidence can you show to prospective customers that you can truely offer a good, reliable service? This is a once in a lifetime moment for your prospective customers and they will want to be 100% confident you will deliver what they are expecting, as there are no second chances. If they want professional photographs (which is usually the case) then they will spend the money getting a proven professional. They will have many friends who can take some snapshots of their happy day too, and they will not have to pay for those.

I think you need to prove yourself as a professional photographer first, before hoping to jumping into the lucrative wedding photography business.
Then you may have a successful marketing strategy.

adamdynamic

Premier wrote: »

Photographic equipment sounds like it would be considered capital expenditure. You would need to depreciate this over time and offset the depreciation against gross profits you make to reduce your tax liability.

Pitfalls? Well you say you have done this previously for friends so it sounds like you have experience. However that leads to the question of why you need to immediately upgrade your photographic equipment. Have you done professional standard photography? (in which case why not continue to use that equipment?) or have you just taken a few snapshots at a friend's wedding?

Essentially, what evidence can you show to prospective customers that you can truely offer a good, reliable service? This is a once in a lifetime moment for your prospective customers and they will want to be 100% confident you will deliver what they are expecting, as there are no second chances. If they want professional photographs (which is usually the case) then they will spend the money getting a proven professional. They will have many friends who can take some snapshots of their happy day too, and they will not have to pay for those.

I think you need to prove yourself as a professional photographer first, before hoping to jumping into the lucrative wedding photography business.
Then you may have a successful marketing strategy.

Hey,

Thanks for the reply! With reference to the tax credit, my initial question is in the 'first year' will I be able to classify any equipment purchases as 'business expense' and use this to reduce my overall tax bill including the tax I pay on my 'day job' salary?

With reference to the rest of your comments, I've got no concerns about my skill level or my experience - I've had 'pro-quality' equipment in the past but in recent years have had to sell it to make ends meet. My situation has changed now and I'm able to get back into it, I'm just wondering whether I can do the 'business side' of things in a better way?

Thanks again for the response!

Adam.

Horace

The HMRC offer free courses on completing your self assessment, they also tell you what you can and cannot claim for.

You could buy new equipment and then put this down as depreciation year on year.

Remember that you will need to apply for Class 2 NI as well.

Not having completed a self assessment for ages (my accountant does mine) I feel sure that I had to include the tax as shown on my P60 as well as any income from the business on the tax return. The HMRC then tell you if you owe them tax or not.

With self employment you pay tax on your profits. No profit then no self employed tax.

Have you built up a portfolio of work that you can show to prospective clients? You will need this when touting for business. Consider how you are going to market your business - wedding fairs are expensive and tend to be over run with photographers to the point where organisers are now saying that they will only allow two photographers at most to be in attendance.

Do you have a website? If not consider the cost of setting one up - use this as a way of displaying photographs and attracting customers. Sort your pricing out too - what do others charge, are you comparable. Seek professional advice and not that of family and friends who will only ever tell you what you want to hear and not cold hard facts which may be the opposite.

heretolearn_2

What you are asking about is a tax refund (having tax already paid refunded to you), not a tax credit (which is the name of a type of benefit these days).

Yes, if you make a loss in your business, you can get a refund of some of the tax paid through your PAYE job. How you should be doing your accounts to work out loss or profit is something you should get an accountant for, or go and see one for a consultation at least. Without knowing all the ins and outs we can't really tell you here.