Self employment means that you work for yourself. Many artists work in different short-term projects and get paid as a freelancer. Some also have regular employment too.

people passing in front of studio window
Photo by Claire Dickinson

How do artists work?

Artists, like everyone else, will work in different ways. You need to think about what way works best for you to earn the money you need.

  • Most artists have regular employment. This might be a job in the arts or something outside of the creative industries. It is common for artists to have more than one job.
  • Outside of regular employment many artists are also self employed. This means that you work for yourself. It is not the same as starting a business, but it has some things in common. You will be responsible for working out and paying your own income tax, for example.

Many artists use a mix of employment and self employment to earn a living. Some only earn money through self employment. Others might have a full-time or part-time job. How you work will depend on:

  • If you prefer to have a regular income. Some people are able to earn different amounts of money each month.
  • If you want to have more control over your tax. Calculating and paying your own tax takes time and can be complex. Some artists pay for an accountant to help them.
  • The kind of work you do. You will need to be self employed if you do short-term projects with arts organisations.

What is self employment?

Being self employed means that you work for yourself rather than for an employer.

If you were working full-time or part-time for a company, you would pay income tax from your salary. Workers pay income tax to Her Majesty’s Revenue and Customs (HMRC). This is the name of the tax office in England. As an employee you do not work out your own tax.

When you are self employed HMRC asks you to fill in a Self Assessment form every year. Your form tells them how much money you have earned from all your employment. They will work out what tax you owe them by:

  • Looking at what income tax you have already paid through regular employment
  • Looking at the profit you have made from self employed work
  • Making a calculation to see if you owe them more money. If you did not make a profit they might owe you some money instead.

Profits and deductions

It is important to emphasise that you only pay tax on your profits. It takes money to run your self employment ‘business’. Artists have many costs associated with their work to pay like:

  • Studio rental
  • Utility bills
  • Materials
  • Travel costs (even if these are not for the making money)
  • Equipment
  • Professional memberships
  • Insurance
  • Postage and stationery
  • Internet and phone
  • Professional servics: things like website design, accountant, lawyer, PR and promotion
  • Magazine subscriptions
  • Tickets to museums and art galleries for research
  • Computer and software costs
  • Cars and the cost of running a vehicle

This is not a complete list of the costs an artist might have. Your costs will be specific to the type of work you make and how you make it. Costs like these are called ‘deductions’. You take them off (deduct) them from your income to work out your profit.

Your profits = the amount of money you earn through self employment – the cost of running your business

The more deductions you have, the smaller your profits, and the smaller your income tax.

Tax losses

You make a loss if your total income is less than your total deductions. A loss is when you make less than zero profit.

If you make a loss you can use this to lower your profit in a future tax year. For example:

  • You make a loss in tax year 2014-15 of £500
  • You make a profit in tax year 2015-2016 of £1,500
  • You can use the previous loss of £500 to reduce your profit to £1,000

Using a loss in this way means that you pay less income tax on your profits.

Tax law around losses is more complicated than this simple example. You should contact an accountant for more advice.

Recording costs

You must keep a record of all the money you spend in relation to your self employment. Keep receipts of cash spending and get other details from your bank statements.

Sometimes HMRC does checks on people’s tax records. By law you have to keep these documents for 22 months. You can keep them as digital files on a computer.

Make sure you know what money you have spent on professional or personal expenses. Some artists open a business bank account to keep this spending separate. You do not need to do this but it might make things easier if your work as an artist is complex. Business bank accounts usually charge fees.

Some of your costs might be personal and professional. If you work at home you can claim some of your housing costs as deductions. This includes some of your rent and some of your utility bills. You cannot claim Council Tax or any part of it as this is a residential charge.

How to register as self employed

You can register as self employed online. HMRC says it will take 10 days to get your a Unique Taxpayer Reference number (UTR). You should put this number on any invoices you send to employers to get paid. Your employers will know from your UTR number that you are self employed. You also need a UTR to send your self assessment form.

Some artists start to work and get paid before they register as self employed. You can include these payments in your first self assessment return.

When you start being self employed you might use equipment that you bought before. You can include this as a deduction. The deduction will be the market value of the equipment when you started being self employed. This could apply to a computer, camera equipment, projectors, or other equipment.

Tax returns

Many artists employ an accountant to compile and send their tax return. It can be quite complex to fill in a tax return. You can deduct the fee you pay an accountant from your profits. Chartered accountants have insurance against any mistakes they make in your tax return. Or you might get an accountant for your first few years and work it out yourself after that.

You can fill in your own self assessment form online. HMRC will calculate the amount of tax you owe straight away once you finish the form.

You will send a tax return for the ‘financial year’ that you worked. This is 6 April to 5 April the following year. You have to pay your self employment income tax by the end of following January. You could get fined if you don’t pay your income tax on time. You can pay income tax online.

You need to fill in a self assessment form even if you did not earn any money from self employment.

You do not have to pay any income tax if you earned less than the personal tax allowance.

National Insurance

Everyone who works has to pay National Insurance (NI) contributions. This pays for your pension and some social security. These are not voluntary payments and it is illegal not to pay them.

National Insurance is split into different types of payment (‘classes’). Self employed people pay either class 2 or class 4 payments depending on how much they earn. If you have missed some years of payment you can top up your payments. This will mean you get a full state pension when you retire.

You will pay National Insurance contributions through self assessment.

Other resources

The HMRC YouTube channel has resources on:

They also have lots of information on self assessment.

TaxAid is a charity that gives advice to low income workers who can’t get help from HMRC. They have useful online resources about the tax system and processes.

The article is for information only. It does not providing accounting and tax advice. Consult an accountant on your specific circumstances.

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