As a Photographer - Do you have an accountant?

[xrrr]

Not quite a cross post, but I am showing how clueless I am in tax matters in the Finance forum:
http://www.pistonheads.com/gassing/topic.asp?h=0&a...

Got me thinking. Do I actually need to spend money on an accountant or do I just need to buy a book?

The accountant's mystical tax magic is what I want them for. For example, I had no idea that I could claim back a percentage of my camera equipment costs if I use them to make money even if they are also used for personal use. I thought it was all or nothing. I never thought I could claim mileage to a location if the intent was to take a commercial stock image (a bit obvious that one I guess).

I am assuming all the pros on here have accountants but imagine you are a part-time photographer with small revenues, would you go the accountant or DIY route? If the former, is there an income tipping point that would make it worth while?

[Simpo Two]

There is a middle ground - a bookeeper.

[Scho]

fyi,

My sole trader return costs around £200 to sort at local accountant.

I have done it myself in the past but I like the feeling of having an expert on my side.

[GetCarter]

I have an accountant who does my photography stuff. I am VAT registered, so he does this too. He saves me more than I spend on him, so he's well worth employing. Everything I spend on cameras, lenses, outdoor clothing, hotel bills, printing, computers etc etc etc is tax & VAT deductible. Remember you can earn ANYTHING and be VAT registered as self employed (it's only when you earn lots that you HAVE to) If you can put up with the hasstle, it's often worth it.

I could do it all myself, but I have some sort of life*, and don't want to waste it doing tax returns.

Top tip... keep EVERY invoice you have for equipment, for if / when you ever go VAT registered, the nice people (read monsters) at VAT will give you ALL your VAT back. It'll be the ONLY time they are nice to you but it's a decent wedge provided you still have the gear, and have the 'dockets'.

ETA - * OK, so due to the amount of time I spend on here, this is debateable.

Edited by GetCarter on Tuesday 18th January 14:13

[EmmaP]

I do my own book keeping and employ an accountant. Well worth the money. Mine charges £250 to do my end of year accounts and submit them to HMR&C.

[Simpo Two]

GetCarter said:

Top tip... keep EVERY invoice you have for equipment, for if / when you ever go VAT registered, the nice people (read monsters) at VAT will give you ALL your VAT back. It'll be the ONLY time they are nice to you but it's a decent wedge provided you still have the gear, and have the 'dockets'.

There is a limit on how long you can reclaim VAT on purchases made before you registered, only a few months I think.

VAT can be reclaimed on purchases used for business but consider this - if your customers are Joe Public (ie cannot reclaim the 20% VAT you have to add to your bills) then you suddenly become 20% less competititive on price. Furthermore, if you stay unregistered, then whilst you cannot reclaim VAT you can put the gross sum into your tax calculations - so not as bad as you think.

For more details you need the Business forum where Resident PH Bean Counter 'Eric Mc' awaits!

[GetCarter]

Simpo Two said:

GetCarter said:

Top tip... keep EVERY invoice you have for equipment, for if / when you ever go VAT registered, the nice people (read monsters) at VAT will give you ALL your VAT back. It'll be the ONLY time they are nice to you but it's a decent wedge provided you still have the gear, and have the 'dockets'.

There is a limit on how long you can reclaim VAT on purchases made before you registered, only a few months I think.

VAT can be reclaimed on purchases used for business but consider this - if your customers are Joe Public (ie cannot reclaim the 20% VAT you have to add to your bills) then you suddenly become 20% less competititive on price. Furthermore, if you stay unregistered, then whilst you cannot reclaim VAT you can put the gross sum into your tax calculations - so not as bad as you think.

For more details you need the Business forum where Resident PH Bean Counter 'Eric Mc' awaits!

No idea what the time limit is these days (I'll bet it's changed - so as Simpo suggests, check), but I got all mine from 12 years repaid. (Over £4k IIRC). If you are not working for those that can offset VAT, then obviously that will have a detremental impact. For me it works, for many it will not.

[Elderly]

You can reclaim the VAT on GOODS you bought up to four years before you registered for VAT, but for SERVICES you bought, you only have six months.

BUT as I understand it (hopefully an accountant will be along soon) - I think that the goods and services have to have been bought for a non VAT registered business.
I don't think it's the same for bringing in capital allowances (income tax).

So ..... if you were a hobby photographer; when you become a pro, you can bring the
value of your equipment into the business but I don't think that you can reclaim past VAT at that stage.
When your photography (or business turnover) exceeds £70K you must register for VAT and at that stage the 4 year and 6 month rules come into play for goods and services that have been bought whilst you were a non VAT reg business.

As Get says .... you can register for VAT any time you like.
When I first started I was way below the threshold but as I only dealt with VAT registered companies, being VAT registered gave me a degree of 'credibility'.

Edited to say that I do have an accountant but I do my own VAT which hardly takes any time at all with the aid of one of those computer things .

Edited by Elderly on Tuesday 18th January 17:30

[xrrr]

Thanks all. I had a quick conversation with Eric Mc on the phone earlier on this week and I have come up with a 'policy' based on the tips Eric gave me.

I am probably going to do it myself this tax year given my puny turn over.