This won’t be the full picture or provide all the answers, but should give you some food for thought, and areas to look into. If you need help with the exact tips and expenses applicable to you then feel free to get in touch.
Make sure you claim all your expenses – sounds simple but what might that include, here are a few areas.
- How do you write? Do you have a notebook/journal, or a tablet device or do you stick with the PC/Mac?
Think of all the costs associated with how you write – pens, paper, books, computer and ancillaries. Make sure you record them all.
- What about the inspiration for what you write? Where does this come from – internet research, trade journals, magazines, books?
Think of all the sources that help you and the costs – e.g., magazine subscriptions, are you including all these? Beware though of HMRC guidance for employees: ‘No deduction under Section 336 ITEPA 2003 can be permitted for the cost of newspapers or magazines purchased by a journalist merely in order to keep informed or up-to-date. The expense is not incurred in the performance of the duties of the journalist’s employment. This conclusion was reached by the House of Lords in the case of Fitzpatrick and others v CIR (66TC407).’
Unfortunately, usually there are not hard and fast rules!
- Where do you write? At home, do you have to attend meetings; do you have an office you have to get to?
Have you allowed for the appropriate travel costs whether in your own car, taxi, trains, planes or automobile? Don’t forget this doesn’t include your normal commute.
What about the costs for working from home? – this can be a complex and potentially tricky area, so I recommend professional help to maximise your claim.
Averaging profits for literary works
In simple terms if you write a book which sells a lot in one year, and you don’t get so much the next year, perhaps because you’re writing the next volume, you can average out your profits over 2 years.
This can save you tax if you go into higher rates of tax for only one of the year, or end up not paying tax for one year. If you think it might apply it would be worth getting professional advice on this.
This can affect freelance journalists, who need to ensure that their employment status is appropriately determined. HMRC have a leaflet and an online tool to assist with this, though it’s not necessarily the full picture, so again professional advice may be needed.