Digital Artist Sole Trader - Questions

Cirias

Hi everyone,

I recently started taking paid commissions in a rather niche market (fantasy/speculative map artwork). I have registered as a sole trader with HMRC and I conduct everything through my business Paypal account using invoices.

As I do everything digitally, I have no raw materials or stock that I need to pay out for. I also have no physical product that I send, it's just an image file that is emailed to my client. My takings are likely to be less than £2000 this coming year - I have a separate full time job and this business is a second income/job. So, I wanted to confirm a few things. I have done my own research and I am relatively confident that I have covered all bases.

1. I assume that I don't need to take out consumer liability insurance, as I am not providing any physical product to my customers?
2. As the business has no outgoings, does this create any other challenges when it comes to tax or other aspects of the business?
3. If I purchase new hardware (i.e. laptop, graphics tablet or software) solely for the business, do I declare that in my tax return as a business expense?
4. Any other considerations from being a wholly digital business with no physical product/premises?

Thanks everyone for your time!

Mistral001

You certainly do have business expenses. Here are some I can think of:
-Use of home(a proportion of heat, electricity, rent/mortgage)-
-Paypal fees
-Cost of software that you use to produce these images
-Accountancy fees (if you get an accountant)
-Legal fees (if you get legal advice to help protect the work you produce)


As far as getting insurance is concerned, the only insurance you require by law is employee insurance and that does not apply here. I cannot think of any insurance you would be advised to get either for that type of business.

Cirias

Aha, that's true. Completely forgot about the home expenses and fees.

The software I use is free (GIMP). I was planning to switch to Photoshop after a while, but I have come to prefer the free software and now work better in it than I do PS.

ilikedrawing

Laptops, tablets, hardware...anything for your business are business expenses.

Even if you bring in to your business your own personal laptop you owned before you started, this is classed as a business expense. HMRC would value it at what you'd get for it if you sold it. If that makes sense!