In this weeks professional contexts session we looked at how you should go about setting up a business. We looked at:
-loans
-business plans
-advertising
-taxes
There are some responsibilities as a business owner which are: assets (big tangible items), consumables (everyday items) and services (non tangible things). This is important to know as a business because you can claim back purchases within four years of having that business (that is why it is good to keep receipts and records).
Liabilities
Insurances you make need to consider investing in are:
-public liability (keeping yourself safe) A LEGAL REQUIREMENT
-camera/equipment insurance
-professional indemnity NOT A LEGAL REQUIREMENT
-employers liability
Other LEGAL REQUIREMENTS are Tax returns (yearly) and VAT returns (quarterly). If you do happen to miss your VAT payment you can easily let them know your reason and they should provide an extension.
VAT- tax on goods and services, businesses don’t pay it but individual businesses do.
Most big companies charge VAT so you could claim back those if you are VAT registered, additionally being VAT registered can give you and your business some credibility.
Submitting a tax form:
Tax returns are submitted with records and expenditures.
- you don’t pay tax when your personal allowance is up to £11,850
- you pay 20% tax when your personal allowance is between £11,850-46,350
- you pay 40% tax when your personal allowance is between £46,350-£150,000
- you pay 45% tax when your personal allowance is £150,000 and over
Declaring yourself as self employed
This can be done via the HMRC website where you can declare yourself as a:
-Soletrader: this is where you can work alone under your own name or a business name.
-Partnership: this is setting u a business with on or more people
-Limited company
-Limited Partnership
Most photographers act as sole traders as this is probably the simplest method. It is important to remember wen looking at loans that you are, as a business, important to banks as you will owe them money which means they are making money.
Although this session was not my favourite or most interesting, I feel it was crucial to learn about for the future when I evidently do want to set up my own photographic business. If it wasn’t for this I don’t think I would have known where to start at all. I still don’t think I fully understand it all, however I am aware this will all probably come with time and I am looking forward to the day I can set up my very own business, promoting my photography.