Accountants For Writers

Our specialist team has an in-depth knowledge of creative businesses and all of the accounting issues involved.

While you could easily find a company that provides traditional accounting services or even a chartered accountant, we tailor our service to the specific needs of the client and the industry - in this case, writers and authors. You won't need to waste time explaining your irregular income or working hours. There's no need to tell them about things like agent's commission or anything like that.

They are aware of all the challenges facing authors and writers, and you'll be on the same page from day one. This forms a firm foundation for a professional working relationship based on trust.

In addition, they offer specialist advice and a comprehensive range of accounting services that you can rely on, including those listed below.

Self-Assessment Tax Returns

The self-assessment system isn't the easiest to negotiate, and for self-employed writers, it can be a nightmare. It's a job that's too easily put off, but this can result in fines and financial penalties you could do without.

The main problem is assessing what you are legally entitled to claim on expenses, and that is no easy task at times. For example, you can't claim for petrol costs in general, but you may be able to do so for a trip that is necessary for your work. You may also be able to claim for things like computing equipment, train tickets, accommodation, digital software, business cards, etc., provided they are solely for work use.

The figure you pay depends on your employment status and gross income, and your Auditox accountant will work all of this out for you and then process the payment (or arrange a series of convenient monthly payments).

We can also advise you on the new cash basis option introduced by HMRC recently, which aimed to simplify the self-assessment system. While this may be helpful for some people, it prevents writers from offsetting losses against other income and can limit what they can claim on expenses.

The earnings basis is much more flexible, and this is the course we would generally pursue.

National Insurance Contributions

This goes hand-in-hand with the self-assessment return, as you pay your NI contributions at the same time.

However, you need to work out which class of NI you fall into, or you could pay too much or too little, and HMRC will eventually be on your case.

In rare cases, writers and authors may qualify for reserved trading income status (which was previously called reserved schedule d status), where they are still allowed (under certain circumstances) by HMRC to act as self-employed even when on a payroll.

Either way, our accountants will establish precisely which class NIC you should be paying and liaise with HMRC in the event of any queries.

Tax Advice

We offer specialist advice on all tax and accounting matters for our writer clients.

Your dedicated accountant will examine your financial affairs and recommend reasonable and allowable methods of reducing your tax liabilities where possible.

They will also investigate any double taxation issues that arise. This happens when you get taxed twice for the same income, usually when funds have come from another country, and you may be taxed there as well as in the UK.

Although the UK has double taxation agreements with most other countries, there are several that are not part of this agreement. Wherever possible, we will help to avoid you having to pay tax on your income in the other country involved.

Your Auditox accountant will also advise you on capital allowances, so you can claim tax relief on certain physical assets as well as fees paid to literary agents.

Annual Accounts

It's good to have a set of clear, professionally compiled annual accounts, even if you are a sole trader.

However, for a limited company, they are compulsory and must be sent to Companies House each year. If you exceed the threshold for Corporation Tax, you'll also need to send a copy of these accounts to HMRC.

Our accountants will help you with all of these if necessary; they will compile the accounts professionally and competently, send them to Companies House before the given deadline, and calculate and pay your Corporation Tax bill.

A clearly presented set of accounts is always a bonus when securing investors, partners or loans from banks. Our accountants will ensure that your annual accounts are perfectly prepared, giving you the best chance of making a positive impression.

Tax Returns

Aside from self-assessment tax returns for sole traders, we also help companies complete their annual tax returns.

These can take a while to complete, and it's easy to make mistakes - especially if you're not that keen on doing the job in the first place! The most common error is using the income after the deduction of items such as agent's commission and VAT, whereas the gross income should always be used. You can then make a separate claim for these items.

We will ensure that you avoid mistakes like this and get your tax return completed quickly and on time so that you avoid any financial repercussions from HMRC.

VAT Returns & Advice

We also deal with VAT returns as part of our accounting and tax services, although relatively few professional writers need to register for VAT.

Generally, you won't need to pay VAT costs if your publisher is based outside of the UK or your trading income is below the threshold (currently £85,000).

However, the rules, as you might guess, are far from straightforward, and it's easy to become bogged down in the fine details.

Some companies choose to register for VAT even though they are below this threshold, and this has both its advantages and disadvantages. If you choose to register even though you are below the £85k limit, you will have to make sure that you charge VAT on the right transactions. You will also need to make sure that your publisher adds VAT to any royalty payments - if they have your VAT number, this shouldn't be an issue.

Our accountants will guide you through all of the pitfalls and red tape to ensure that any VAT costs are met and that you stay within the rules.

Financial Planning

Your dedicated accountant will meet with you to discuss your financial expectations, professionally and personally.

They will examine your financial position and recommend effective structures for the business side of things as well as your private finances for the future.

This will be tremendously helpful as you will have full control over your money and will be able to reap maximum benefits whilst remaining fully compliant.

Business Structures

Authors and writers can set themselves up as a limited company rather than stay as a sole trader. There are advantages and disadvantages for both, depending on your circumstances and income sources.

When you set up a limited company, you create a new 'legal person' that can hold bank accounts, pay taxes, enter into contracts, etc., in its own right. This will still continue to exist after your death and can be sold on.

As a sole trader, you are the actual 'business' under your own name.

We will explain the pros and cons of each one and help you make the right choice, but it is imperative that any paperwork is 100% accurate and that you understand the legal implications involved.

For example, the copyright laws are such that if you create a limited company, any income is paid to the company, not you. And if you set up your limited company after producing a written work, you can't hand over the copyright to that company - it has to be sold under a written agreement for the current market value.

The trouble is that HMRC may place a different value on this, which causes problems. You'll also have to pay income tax on any profit from the sale of the copyright.

As part of our accounting services, we will steer you through complex decisions such as this to find the best solution for you and your business.

Employed, Self-Employed, Or Both?

Many people believe that you are automatically classed as self-employed if you are not an employee (that is, on a company payroll), but the truth is that you can be both at the same time.

It is entirely possible to work for several companies at once or to be self-employed in one role and an employee in another.

The trick is to keep on top of any changes to legislation and to make sure that you don't fall foul of any HMRC rules. In your employment, any NIC and tax liabilities will be sorted out by PAYE, but you will need to handle any tax or NIC issues relating to your self-employment earnings.

The current trading allowance limit for self-employed earnings is £1,000, so if you earn more than this, you will need to complete a self-assessment tax return, taking into account any expenses.

Whatever your employment status, our accountants will be able to advise you on the best approach. They will ensure that you stay on the right side of the HMRC rules so there are no nasty surprises!

Cash Flow

Money is designed to flow; that's why it's referred to as currency.

It comes into your bank account as income, and it goes out as payments for other goods and services. For our writer clients, this can be erratic. Creative industries are notorious for their sporadic and irregular pay, often making it difficult to predict your gross income.

Cash flow, however, refers to the net cash or equivalents that are moving in and out of your business at any one time.

You are expected to keep track of any transactions in and out, as this makes it easier to prepare your accounts and sort out your expenses when the time comes.

We will help you to keep track of these and offer a cash flow forecast to give a projection of how your finances will look in the future.

Expert Advice

On top of all this, we can provide advice on all matters pertaining to writing work in the creative sectors, including:

Intellectual Property Rights

Analysing Contracts

Royalty Auditing

Brand Expansion

Contract Negotiation

Our specialist team can advise you on all of these issues and more, giving you peace of mind to know that whatever the problem, we've got you covered.