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pringle
pringle  6 United Kingdom
30 May 2011 - 3:46 PM

I am looking into the possibility of business but do wonder what advantages there is in having a business over a hobby that pays for itself. How far can you go with a hobby before I would have to pay tax? Is there any advantage in business for buying equipment. I am very tentatively looking into this knowing that its a difficult market now with everyone owning a "good" camera!!.

Thanks.

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30 May 2011 - 3:46 PM

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Carabosse
Carabosse e2 Member 1139444 forum postsCarabosse vcard England269 Constructive Critique Points
30 May 2011 - 3:51 PM

Worth taking a look at this pro's blog article as a starting point.

loweskid
loweskid  132042 forum posts United Kingdom1 Constructive Critique Points
30 May 2011 - 4:17 PM


Quote: How far can you go with a hobby before I would have to pay tax?

In law you are obliged to declare any earned income - whether or not you pay tax on it depends on your total income and your personal circumstances.

pringle
pringle  6 United Kingdom
30 May 2011 - 4:29 PM

you would only be allowed to earn so much before you would have to pay tax on earnings.

Carabosse
Carabosse e2 Member 1139444 forum postsCarabosse vcard England269 Constructive Critique Points
30 May 2011 - 4:59 PM

Broadly, your total income from all sources is taxable, less the first 7475 of it.

Rates and Allowances here.

User_Removed
30 May 2011 - 6:08 PM

I am afraid that HMRC does not differentiate between "paying hobbies" and "businesses". If you earn any money at all, they will want to add it to your other taxable income and get their greedy little paws in a percentage.

It does not matter how little you earn from photography. If, for the sake of argument, you have a wage of 25,000 pa and then earn 500 from freelance photography, then your taxable income becomes 25,500.

Best way is to put your photography on a proper business footing and keep proper accounts. That way your photography expenses can be set against your photography income. Indeed, if you can (honestly) show that your photographic business runs at a loss, then that loss will be set against your other income.

Andy_Cundell
30 May 2011 - 6:11 PM

The trouble with 'business' compared to 'hobby' is pressure.

I know some dam good photographers that refuse to go pro and go into business because as soon as you 'have to perform' it takes the fun out of it.

Andy

ade_mcfade
ade_mcfade e2 Member 1014812 forum postsade_mcfade vcard England216 Constructive Critique Points
30 May 2011 - 6:47 PM


Quote: Indeed, if you can (honestly) show that your photographic business runs at a loss, then that loss will be set against your other income.

you can buy lots of kit to do that remember Wink

Carabosse
Carabosse e2 Member 1139444 forum postsCarabosse vcard England269 Constructive Critique Points
30 May 2011 - 7:04 PM


Quote: Indeed, if you can (honestly) show that your photographic business runs at a loss, then that loss will be set against your other income

Really? If that is the case, HMRC must have changed their stance since time immemorial! Wink

Normally any loss can not be set off against, e.g. income from employment or investment income. But you can carry forward your losses to be set off
against future profits from that business.

thewilliam
30 May 2011 - 8:19 PM

There have been plenty of cases where the losses of one business have been set against the profits from another. Maybe it just takes a good accountant!

Carabosse
Carabosse e2 Member 1139444 forum postsCarabosse vcard England269 Constructive Critique Points
30 May 2011 - 8:28 PM

Not really. You've just to show some link. A friend of mine is a professional musician and most of his income was from self-employment, but some from employment. But all his income was as a musician so in that instance it was all lumped together for tax purposes.

But the idea that, for example, your losses as a photographer could be set against your employment income as (say) a bus driver is pie in the sky! Wink

User_Removed
30 May 2011 - 9:15 PM


Quote: Indeed, if you can (honestly) show that your photographic business runs at a loss, then that loss will be set against your other income

Really? If that is the case, HMRC must have changed their stance since time immemorial! Wink

Normally any loss can not be set off against, e.g. income from employment or investment income. But you can carry forward your losses to be set off
against future profits from that business.

Don't know where you got that from, caraboose. I even got losses from my web design business in 1998 set against my pension income in 1999.

Carabosse
Carabosse e2 Member 1139444 forum postsCarabosse vcard England269 Constructive Critique Points
30 May 2011 - 9:24 PM


Quote: I even got losses from my web design business in 1998 set against my pension income in 1999.

You were very lucky, and/or someone at the Revenue didn't bother to check! Wink

scottishphototours


Quote: Is there any advantage in business for buying equipment.

None whatsoever. If you're in business ONLY to get yourself some good kit, then the hassle, pressure and added workload of the business far outweigh the "pleasure" you'll get with the new kit.

Being in business for kit is not a path to success - never has and never will be. You have to want the business first and want it to succeed - and if new kit is part of that then great - result.

I personally can't get excited about kit these days - it either works and makes my business better or it doesn't and gets sold.

MikeRC
MikeRC e2 Member 93501 forum postsMikeRC vcard United Kingdom
30 May 2011 - 9:39 PM


Quote: How far can you go with a hobby before I would have to pay tax?

Oh dear...you've done it now, somebody from HMC&E will have looke at those cracking pics in your pf. and on your website.
......expect a knock on the door in the next few days.

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