Film as business / TAX

22 replies [Last post]
Nintembo
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Joined: Jun 22 2004

Hi,

I'm 99% finished on my first documentary which was a huge learning curve for me - and I am still learning more everyday.

Had a horrible (potentialy) lesson yesterday though...

I need to book time with an accountant to get a stronger gist of it all, but what will I be able to claim on to get money back from the Inland Revnue?

I have been told basically everything I bought to get the business "film" off the ground. However, the majority of the work was done cash in hand.

If I had paid via cheque (+tax) etc, would I have of been able to claim all the money back as business spendings?

I'm greatly interested in hearing what you think.

Thanks

Alan Roberts
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Joined: May 3 1999

Always, ALWAYS, ALWAYS get receipts, and keep them, however trivial the amount may seem. Keep everything. Find an accountant, fast, very fast. I found a retired IR emloyee who does some part-time money work, and she did my accounts and filled in the tax form, and worked out how much I owed, all in 2 hours. I paid her 4 times what she asked for (which still wasn't a lot). Don't put this off, do it now. And don't be ashamed of getting someone else to do your accounts, because you can claim that as a business expense (but you can't if it's only help with filling in the form).

Get my test cards document, and cards for 625, 525, 720 and 1080. Thanks to Gavin Gration for hosting them.
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Also EBU Tech.3335 tells how to test cameras, and R.118 tells how to use the results.

Nintembo
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Joined: Jun 22 2004

Hi Alan,

So would I able to claim everything back as a business expense?

pkbristol
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Joined: Jan 23 2008

On paper,earn as LITTLE as possibe/believable,spend as MUCH as possible/believable,shouldn't be hard if you get paid a lot in cash.
ie,if you spent 10k on equipment last year,(april 07>april 08) and only "declared" that you earned 15k,(the payments by cheque),then you'll get taxed on only your profit which is 5k,HOWEVER,you can earn around 3.5k a year before you get taxed,so you should get taxed on 1.5k,around 22% of that will be £330.
However,if you only earned 5k (cheques again),then you've lost 5k,cos you spent 10k to get started in busines,so you could get a rebate,woohoo.
Hope this helps,i've been self mployed for around 7 years now.

StevenBagley
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Joined: Aug 14 2000
pkbristol wrote:
On paper,earn as LITTLE as possibe/believable,spend as MUCH as possible/believable,shouldn't be hard if you get paid a lot in cash.
ie,if you spent 10k on equipment last year,(april 07>april 08) and only "declared" that you earned 15k,(the payments by cheque),then you'll get taxed on only your profit which is 5k,HOWEVER,you can earn around 3.5k a year before you get taxed,so you should get taxed on 1.5k,around 22% of that will be £330.
However,if you only earned 5k (cheques again),then you've lost 5k,cos you spent 10k to get started in busines,so you could get a rebate,woohoo.
Hope this helps,i've been self mployed for around 7 years now.

You can only claim back 50% of the cost of Equipment in its first year... You claim the rest back over the lifetime of the equipment (minus any money recovered for selling it).

Steven

Nintembo
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Joined: Jun 22 2004

But I don't own any equipment? I pay people to film etc.

What I'm asking is, would I be able to get this money back if I had receipts?

Rob James
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Joined: Jun 26 2001

Of course. You may still be able to claim it if you can provide convincing evidence of the expenditure. You need an accountant. Choose carefully and it is the best money you will ever spend. In the first year of trading you are more likely to get away with less than satisfactory evidence due to inexperience. I trust you have registered as (part?) self employed with the IR and NI or you''ll be in more trouble.

Rob The picture is only there to keep the sound in sync

Nintembo
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Joined: Jun 22 2004
Rob James wrote:
Of course. You may still be able to claim it if you can provide convincing evidence of the expenditure. You need an accountant. Choose carefully and it is the best money you will ever spend. In the first year of trading you are more likely to get away with less than satisfactory evidence due to inexperience. I trust you have registered as (part?) self employed with the IR and NI or you''ll be in more trouble.

Not yet, as untill I sell the doc I have no income.

StevenBagley
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Joined: Aug 14 2000
Rob James wrote:
Of course. You may still be able to claim it if you can provide convincing evidence of the expenditure. You need an accountant. Choose carefully and it is the best money you will ever spend. In the first year of trading you are more likely to get away with less than satisfactory evidence due to inexperience. I trust you have registered as (part?) self employed with the IR and NI or you''ll be in more trouble.

When you register as self-employed, you get the chance to go on a trianing course about this sort of stuff -- I well recommend doing so.

Steven

Rob James
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Joined: Jun 26 2001

Depending on how much you are expecting to realise from the doc it would probably still pay you to register sooner rather than later.

A lot of us have been through this process so keep the questions coming.

Rob The picture is only there to keep the sound in sync

Alan Roberts
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Joined: May 3 1999

Don't be tempted to make it look like you work for peanuts, they're not stupid and can demand to see your accounts (which means EVERYTHING) for the past 7 years. Like I said, get an accountant, fast, today, don't wait, you can't afford to waste time.

Get my test cards document, and cards for 625, 525, 720 and 1080. Thanks to Gavin Gration for hosting them.
Camera settings documents are held by Daniel Browning and at the EBU
My book, 'Circles of Confusion' is available here.
Also EBU Tech.3335 tells how to test cameras, and R.118 tells how to use the results.

JerryLE
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Joined: Oct 1 2005
How about a dedicated "Business Section"?

A good thread to suggest this, whilst it's probably not going to be the most used section, that a dedicated business section might be worth thinking about? Although there is a 'Situations Vacant' and this (Movie-making Techniques) section neither really are the place for the office / paperwork side of the business.

ClaireTall
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Joined: Jan 28 2004

You should register within three months of becoming self employed.

Are you actively seeking work as a self employed person? do you have a daytime job? do you have any other income? Are you sure you are going to make money from your film because if not don't register because the forms will not stop.

If you are serious about making a living from the industry you need to get organised, get a receipt for everything, even a sandwich from M&S if you are working away. If your admin isn't organised you won't succeed. Generally admin takes about 10-15% of your time and seems to be the most common lacking.

Studio with green screen for hire near Gatwick Airport.
Kit hire facilities on site.
excelsiorstudios.co.uk

Rob James
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Joined: Jun 26 2001

All good advice! Boring I know but it's your money your'e saving by doing it.

Very good idea Jerry! I'd like to see a business section too.

Rob The picture is only there to keep the sound in sync

DAVE M
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Joined: May 17 1999

A "third" for a business section. Could be useful

I know several people who operate on the fringes as they do private work while having full time employment. They are often reluctant to step over and register as they maybe only do £3-4k tops with most of the revenue being turned back into gear.

Part of the problem is that HMRC assume that everybody is intending to fiddle huge amounts.

Local bands are an example - I have loads of mates who spend everything they earn from gigs on gear and vans to keep gigging. In an ideal world they could register the band as a company and only spend the gig money, keeping their PAYE tax separate. Really, it's a hobby but (in theory) one that doesn't cost them>

Alan Roberts
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Joined: May 3 1999

An accountant's fee is the best money you can spend, far better value than any piece of kit you ever buy. The nice lady I found told me that they look at the balance, not the amount. If you appear to be trading at or near a loss, they'll look very carefully at everything because you can't possibly live while making a loss unless you're being bankrolled, and that counts as income so should be declared. Like I said, they aren't stupid, so don't try to be too clever, if you some of your kit for personal use as well as business, you claim the full amount, but then include a "disallowable" entry to compensate for it. That shows them that you're trying to be open and honest about it.

Get an accountant. It's stupid to try to run a business without one, people go to prison when they're found out doing it all wrong.

Get my test cards document, and cards for 625, 525, 720 and 1080. Thanks to Gavin Gration for hosting them.
Camera settings documents are held by Daniel Browning and at the EBU
My book, 'Circles of Confusion' is available here.
Also EBU Tech.3335 tells how to test cameras, and R.118 tells how to use the results.

Gyr
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Joined: Jan 17 2005

I'd vote for a separate Business section as well.

I once spoke to someone at the Inland Revenue and they said they had standard "profiles" and if your returns didn't match their profiles (eg v low profit compared to the turnover) then you were likely to attract their attention.

They are also familiar with people who have what is in effect a paying hobby.

Alan Roberts
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Quite so, the nice lady who sorted me out is a retired IR employee and knows the tricks. They can spot fakes pretty easily. Use an accountant, get it right.

Get my test cards document, and cards for 625, 525, 720 and 1080. Thanks to Gavin Gration for hosting them.
Camera settings documents are held by Daniel Browning and at the EBU
My book, 'Circles of Confusion' is available here.
Also EBU Tech.3335 tells how to test cameras, and R.118 tells how to use the results.

Nintembo
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Joined: Jun 22 2004

OK how do I register for VAT so I can start paying VAT and collect the receipts?

Alan Roberts
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Get an accountant first, today. You don't need to register for VAT if your turnover is low (sub £60k IIRC), but you should have been collecting receipts from day #1. Anything you haven't got receipts now for is probably not going to count as expenses. Use an accountant, they're good for you.

P.S.: I'm not an accountant or related to any, I've just used one and got what I needed quickly and cheaply. You get all the information from them, and they can trace it all back to HMCR rules (mine had a rule book at least 2 inches thick). And, by the way, this is the fifth time I've given you this advice.

Get my test cards document, and cards for 625, 525, 720 and 1080. Thanks to Gavin Gration for hosting them.
Camera settings documents are held by Daniel Browning and at the EBU
My book, 'Circles of Confusion' is available here.
Also EBU Tech.3335 tells how to test cameras, and R.118 tells how to use the results.

StevenBagley
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Joined: Aug 14 2000

Another thing to add -- HMRC are not the bad guys. I know it is popular to think of tax collectors as the scourge of society but in my experience the people at the tax office are incredibly helpful and friendly people. Wait until after January 31st (they are going to be too busy dealing with last-minute self-assessors at the moment), and pop into your local tax office and ask them about it. Explain that you have made a film out of your own funds in the last year or so and that you are about to start selling it and you want advice on how you should register and pay your tax bill.

They'll explain how to register and probably point you towards a couple of courses you should attend which will guide you through what you need to do and what you can and can't claim back etc.

As the adverts say, 'Tax doesn't need to be taxing'...

Steven

Alan Roberts
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Spot on, I've had terribly nice conversations with the tax offices. They're exceptionally helpful. But don't try to con them, they know all the tricks and can spot a con from light years away.

Get my test cards document, and cards for 625, 525, 720 and 1080. Thanks to Gavin Gration for hosting them.
Camera settings documents are held by Daniel Browning and at the EBU
My book, 'Circles of Confusion' is available here.
Also EBU Tech.3335 tells how to test cameras, and R.118 tells how to use the results.

ChrisG
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Joined: Apr 10 1999

As has been mentioned before you should register within first 90 days of trading as a sole trader otherwise those nice people at the govt are duty bound to fine you.

You can be a sole trader and offset your losses against your paye quite reasonably as a start up business.

As Alan says, get an accountant, preferably by recommendation, even better if they are ex-IR ( :) ) - best money you will ever spend.

Oh and keep an accurate diary, a basic accounts diary from day one or you'll end up drinking too much and wasting film making time looking for " bits of paper".