Self Employment as an Artist - capital allowances carry over

missymoneypenny

Hello gang. I've been an artist for many years but only for fun, my main job is on a payroll. During lockdown I took up printmaking seriously and bought some additional tools and equipment, and I could start to sell my work if I wanted to. Right now, I am happy to do it without earning, and I know if I start selling I need to register with HMRC but I wonder if it's worthwhile doing so now and being able to claim for my equipment etc? I've spent around £1500 including a press, and it's enough to start making prints properly. I seem to recall from the past when I was self-employed working as a trainer, that you spread your capital costs or whatever they were called for something like a laptop over a number of years? I'm ambivalent about starting selling, but I don't to miss out on an allowance should I decide to go ahead later in the year to start flogging my wares on Etsy or whatever - or in the unlikely event that I gain a well paying commission for example Likely revenue would in likelihood be a few hundred quid a year, unless I decided to really go for it, and even then might only be a couple of grand and I'd register anyway. (I don't want to be up night and day printing tea towels for a few bob so I'll always have my day job). So I suppose my question is, can I carry over the expense of the equipment outlay or part of that should I start earning the FOLLOWING tax year, as we are coming up to April. Hope that makes sense. Ongoing costs would be some supplies, papers and inks etc, and subscriptions/fees. But probably £200-£300 a year so not worth worrying about on their own.

Marcon

Remember that you can earn up to £1,000 without needing to register as self employed or pay tax on your gross earnings from self employment.

Getting a relatively modest tax break may not be worth all the faff. More info here: https://www.gov.uk/expenses-if-youre-self-employed

Sandtree

You may be better posting in the small business section as there are some accountants there but my noddy understanding is that were you to register self employed now you can write down the full purchase as setup costs and so presumably make a loss (depending when you start brining in income). That loss can then be offset against your other incomes or carried forward if you didnt earn enough.

What you are talking about is depreciating the asset, so rather than deducting the £1,500 in year 0 for the purchase of the asset you instead split the value over multiple years, most frequently it'd be 18% per year until the asset value is exhausted.  

There can be reasons why you'd want to write it down immediately or spread it over a number of years... clearly spreading it causes certain cashflow constraints but that may be acceptable.

missymoneypenny

Thanks both for your thoughts and info.