Hello, hello, hello lovely readers! After my break last week (which was basically in aid of a few days off for my birthday) I'm back this week with the full post that I wrote for
Author Allsorts a couple of weeks ago, both because I know there are readers who are not fans of/don't have the time to click away when I post links to guest posts here, and because I want to be able to add a link to the post to my
All About Writing page. It turned out to be pretty popular and a lot of people got in touch to tell me it was helpful, so I'm hoping anyone who missed out on it the first time will get a chance to see it now.
Newcomers
to the writing scene may perhaps be fooled. When you read the phrase
'writer' and 'business' in the same sentence, it's all too easy to jump
to the conclusion that I mean the very important business of which
pyjamas to wear into the Writer's Cave today, methods of ensuring the
supply of coffee doesn't run out midway through a tricky scene, or even
how to convince family and friends that when you're staring fixedly into
space for half an hour you are, in fact, still working, and now is not
the time to begin telling you all about the disastrous cake at aunt
Caroline's charity coffee morning.
It's true that most of us like
to maintain an elaborate fantasy in which we're fluffy, flakey creatives
who couldn't possibly be expected to keep track of income and
expenditure, or understand taxes. But in reality, if and when you become
a published writer, you will at some point need to start thinking of
yourself as a business (to a certain extent - don't turn into a
soulless, faceless, profit-obsessed monomaniac... unless you enjoy it, I
suppose). Otherwise you will not only find yourself in all kinds of
unpleasant money and legal tangles, but you may miss out on
opportunities or entitlements which could be yours.
You see, if
you're a business (as well as a creative individual) then you have
value. Others may chose to invest in you - which is ultimately what
publishers are doing when they offer you a contract. It doesn't mean
that you need to transform into Alan Sugar. It does mean you need to get
a handle on what your responsibilities and resources are, and the
sooner the better.
First of all, when you start turning a profit
from your work - that is, when the income you are receiving from your
work exceeds the outgoings required to produce it - you will need to
register as self-employed. It's not an arduous process, although for
anyone whose only dealings with tax so far have been having their money
deducted at source through PAYE it can be a little intimidating at
first. I'm informed that the service isn't so great now as it was (many
long years ago) when I used it, but the HMRC still have
a Newly Self Employed Helpline which is supposed to be there to offer you support and guidance.
Next
up - do you have MS Office or some other office software that includes a
spreadsheet function? Do you understand how to set up and maintain
spreadsheets? If yes, then you have a great advantage on many writers,
and you should immediately set up a spreadsheet for income and
expenditure related to being a writer.
If NOT - and for the
record, although I have MS Office I can't figure out spreadsheets unless
someone else sets them up for me - then you will need to set up some
kind of document whereby you separate the page into two columns. In the
first, faithfully record every payment that you receive related to
writing. And that means everything, including £4:50 for selling someone a
spare copy of your book. In the second column, equally (if not more!)
faithfully record every single expense related to writing, including,
you'll be happy to hear, money spent on books, stationery, research, and
travel expenses.
Do not wait until the end of the month. Do not
tell yourself you'll do it later when things have calmed down a bit. DO
IT NOW. This instant. Set it up on your Smartphone if you have one.
Perhaps you have an amazing memory and think that it'll be no big deal,
in a couple of weeks, to remember to add that £66.30 you were paid for a
school creative writing workshop or the £2.80 you spent on postage, but
I assure you that when there are a handful of varied, often small
amounts coming in and out each month, you will forget something. I
promise.
Write it down now.
If you're not running a
spreadsheet which will tot up totals for you as you go along, this is
going to look like a lot of scary numbers. You can help yourself by
adding up the totals yourself once a month and noting down the running
total right there in the column so that when you come to the end of the
tax year you're not having to add up twelve months worth of expenses in
one go.
A helpful hint: even if your first profit from writing
came in during some other month, like June or even December, it's most
convenient to ensure that your records start on April the 5th so that
they run parallel to the tax year, and finish on April 4th. You can do
this by going back to April and looking at your expenditures for writing
from that point and noting them down in the second column. Use your
bank statements, Ebay and Amazon order history to jog your memory on
what you spent.
Also invest in
a file box like this,
preferably one with twelve dividers (one for each month of the tax
year, from April 5th-April 4th). Label them for each month, and when
you're out doing shopping and you buy some pens, or a magazine with an
article that might be useful for your new book, or pay for a
taxi/bus/train home from a book signing, make sure you get a receipt and
tuck it safely into your purse or wallet. Then when you arrive home,
put that receipt into this month's section. It's also a great idea to
print out Amazon or Ebay or other online invoices and do the same.
You're supposed to keep these for five years, believe it or not, to back
up your records for the HMRC. If you forget to keep or ask for a
receipt, HMRC will accept a 'contemporary note', which means you should
write down what you spent, when, and on what, on a piece of paper and
sign it, and put it in there instead.
These things are important
because once you've registered for self-employment you're going to need
to do self-assessment. This is where you fill in a tax return showing
the HMRC what you've spent and earned via writing each tax year and then
they tell you how much tax you owe them. Nowadays they also collect
your extra National Insurance contributions this way as well. For many
of us, especially when starting out, this is a tiny or even non-existent
amount. However, if you have another job then often this will use up
all of your tax-free allowance, which makes it more likely you'll be
paying out tax on your writing earnings.
Some writers, perpetually
skint and brought up to consider paying other people for a job they can
do themselves to be lazy and shameful, will actually do the
self-assessment tax return themselves, even if it causes them to lose
about a million braincells through stress each year (that's me, for the
record). Others, especially those who have a day job or started their
careers with a decent advance, will prudently engage the services of an
accountant (best to get one who is experienced in dealing with other
writers through, since there are a lot of loopholes and codicils related
to creative work that the average accountant may be unaware of). In
either case, you will need these records of income and expenditure
(generally known as your accounts) and receipts so that you or your
accountant actually has the information required to fill in the online
tax return.
Now for some more cheerful stuff!
Public Lending Right
is the author's statutory right, within the UK, to receive a small
amount (about 6p most years) each time a copy of their book is borrowed
in the UK's public libraries. The moment that your book has been
officially published you should register for this. Most writers don't
receive a huge amount from it, but the more books you publish the more
it adds up, so make it a habit to register each new book as they come
out, including any large print or reissued editions which have a
separate ISBN.
There's also the
Authors Liscensing and Collecting Society,
which works in a similar way, but gathers up payments for all kinds of
other uses for your work - say, teachers photocopying a bit of your book
for a class, or quotes from your work that might be used in academia.
Again, it's not often a huge amount, but it covers not just UK but also
foreign editions of your work. The ALCS does charge to join and they
also take a percentage of the money that they collect. However, if you
register to become a member of the Society of Authors
- which, if you can afford it, I recommend that you do as quickly as
possible as soon as you have a publishing contract - then membership to
the ALCS becomes free, although they still take their percentage from
the money they collect.
On the topic of the Society of Authors: once you're a member you will have access to
all kinds of resources,
including a series of useful, downloadable guides which offer a lot of
detail about all kinds of writing-business-related subjects which I've
glanced on here. You're also entitled to free legal advice, such as
contract vetting, which can be very helpful. The Society also runs
The Author's Foundation,
which offers grants to writers who have a publishing contract or a
history of published work, in order to help them with research costs, or
buying time to write.
The Arts Council also make grants to writers - through the Grants for the Arts programme
- of between £1,000 and £15,000. These are for artists who wish to
develop their careers or skills, need to buy time to write, or want to
do research that they otherwise couldn't afford. You'll find it easiest
to access this if you're already published and have a publishing
contract in place, but there are exceptions.
If you're a writer in
trouble - perhaps you've lost your day job, suddenly become a carer, or
had a vital source of writing income unexpectedly fall through - then
there is help available to you through the
Author's Contingency Fund (again, run through the Society of Authors) and through the
Royal Literary Fund,
who can make grants to help writers gain a little breathing room or to
solve their immediate financial emergency. Again, you usually need to
have a publishing history, and not all writers can be successful in
applying to these, but it's often worth a try.
Finally, have you
ever thought about Tax Credits? They're not just for people with kids -
if you're working full-time but your household income is below a certain
level then you may be entitled to these (even if, like me, you are
happily childless).
Work through the Tax Credits Calculator and find out, then phone up for an application form.
One
last piece of advice from me: don't hesitate to apply for things that
you may be entitled to, like Tax Credits or grants, based on the (rather
British) belief that you shouldn't put yourself forward, or that your
'hobby' isn't worthwhile. So long as you're honest about what you're
doing and earning you will not get into trouble for asking, and if you
DON'T ask, then you won't ever get. The worst anyone can do is say no.
So be brave, be organised, and embrace writing not only as a vocation,
but as a career.
Phew. I hope this has been helpful, duckies. If
anyone can think of any resources I've missed, please do feel free to
toss them in the comments :)
