Writers and artists are able to deduct certain expenses incurred through their business activities from their taxable profit. Whether an individual is employed or self-employed will generally affect the types of expenses that will be incurred.
An employee will usually have limited expenses that could be considered deductible (their employer will usually provide them with the necessary workspace and equipment). However, there are still some expenses that can be claimed. These expenses must have been incurred ‘wholly, exclusively and necessarily’ in the performance of completing the duties of their job.
If an individual has a subscription with one of the organisations that feature on List 3, published by HMRC, this expenses may be allowable if:
· The activities of the organization directly concern the profession of the individual
The full list of organizations included on List 3 can be found here: https://www.gov.uk/government/publications/professional-bodies-approved-for-tax-relief-list-3/approved-professional-organisations-and-learned-societies
Employees are allowed to claim for expenses incurred in travelling to work, as long as the journey is to a workplace where:
· The individual will be working at for less than two years
· The individual will be spend less than 40% of their working time
Any expenses for overnight accommodation is allowable where:
· An employee has to work at a location that is not their usual place of work, and
· The temporary workplace is far enough away from the employee’s home that overnight accommodation is necessary for them to perform their duties.
Supplies and Equipment
Any supplies purchased specifically for the purpose of an employee’s work, such as paper, pens, inks and paints, is a deductible expense.
Self-employed writers and artists will generally incur more expenses than those who are employed. These expenses will be deductible if they are ‘wholly and exclusively business related’. It is important that detailed records of these expenses are kept as evidence. If an expense has both a business and private benefit, then this expense must be apportioned according to the business usage.
Use of Home
The expenses related to a home office/studio used for business activities are generally allowable. These expenses could include include:
· Council tax
The total number of rooms in the house must be taken into account when calculating the portion of the bills that are considered business related expenses. Additionally, if an area of a house has both a business and private function, the expenses must also be apportioned to reflect this.
If an individual uses an office space/art studio outside their home, the rent and running costs are allowable expenses
Any equipment purchased for business use is an allowable expense, including paper, ink and art supplies. However, these expenses must be entirely business related, and not for personal use.
Any marketing cost incurred in promoting business is considered a deductible expense including:
· Business cards
· The maintenance of any websites and social media accounts
Travel expenses incurred in making business related journeys are allowable (excluding commuting to a regular workplace).
If an individual uses their personal vehicle for business related travel they may claim an allowance for the number of miles they have traveled
The current mileage allowance rates are:
The other running costs of a vehicle can be included such as:
These expenses should be apportioned, taking in to account what percentage of the total use is dedicated to business travel.
Whilst expenses can’t be claimed for any costs incurred pre any professional activity, further education whilst working is allowable (as long as it is relevant to the profession of the individual and is focused on improving the functioning of their business)
Visits to museums and the theatre are allowable if the aim of such visits is to improve the individual’s business.
The salary of any hired assistants (e.g. a secretary) is deductible
Allowable expenses specifically incurred by
o The transport of art to clients or to an exhibition
o The cost of insuring the art
o The cost of exhibiting the art
o The cost of framing the art
o Postage and packaging costs incurred when mailing a manuscript
o Purchase of own book for publicity