Once you have the intention and the funds (see Part 1 of Becoming a Pro Photographer) in place it’s time to consider the legality, rules and regulations and all the red tape of what you need to do. In the UK the government provide a range of free half-day training sessions to help self-employed people get up to speed on everything from paying your taxes to health and safety (visit http://www.hmrc.gov.uk/bst/advice-team-events/work1.htm if you’re in the UK). Another great port of call is www.businesslink.gov.uk who run a plethora of free (and some paid) business course, catering for everything from web marketing to brand building, to assessing customer body language! A quick trawl of the internet should reap some similar courses in other parts of the world too (feel free to suggest resources for your part of the world in comments below) – sometimes these are subsidised by the government. Something else to give great care and consideration is to getting yourself properly insured. Join us again in a few weeks when we will reveal a complete guide on photographer’s insurance.
As inevitable in life, as death – there is no way to avoid paying tax if you want to work. The rules, rates and deadlines will vary massively from country to country so ensure you fully explore what it is you need to do in your own part of the world, and if unsure always employ the services of an accountant who can check you aren’t paying too little – or too much. Regardless of where you work it is advisable that you keep a solid record of your accounts, expenses, income, invoices and receipts. It is recommended that you back up any digital records stored on your computer and also keep a secure paper copy. There are hundreds of software packages out there that can help with the accounts side of your business or – again – employ an accountant to help. This won’t also be useful for ensuring your tax return is correct, but may also help you secure a bank loan or help you to sell or franchise your business down the line.
In the UK as soon as you start earning through freelance methods you will need to register with the Inland Revenue to ensure you pay any appropriate tax and national insurance contributions. However it is worth bearing in mind that self-employed people here can deduct many allowable expenses (i.e. those items purchased exclusively for the business, including printing paper, inks, stationary, parking tickets etc) from the sum earned that financial year to reduce the amount of tax paid. What is more; currently self-employed folk can claim 40p for every business mile travelled using their own vehicle and there are even other allowances for “capital” items such as new equipment. How much tax you pay will depend on whether your income is greater than your tax allowance after expenses have been deducted for that year. For more information on taxes and NI Contributions see www.hmrc.gov.uk.
As in most countries around the world tax evasion in the United States is also illegal, and doing so could lead to you being fined or serving a stint in jail. However thanks to the online payment system (which we also now have in the UK) filling in the tax form return is relatively simple. If you’re just starting out as a self employed person in the US then most of the questions won’t apply. Remember to register as self employed though and you’ll need to pay the basic national insurance stamp over the course of the year which can be made through direct debit.
Amounts vary across the world on how much you are required to pay, but as a good measure of caution in the UK and US, it is ideal to set aside 30% of everything you earn. This should cover your tax bill come the end of the financial year and whatever is left will be a nice little bonus!
When you work as a freelance photographer there will be times when you are asked to sign a contract so be prepared to read the small print carefully before signing. There are plenty of little details to watch out for, such as ownership and copyright laws. Don’t try to ignore these issues as you could end up losing you money, or worse your rights to the images. If there is something you don’t understand, always ask for clarification or take it to someone outside of the company for an objective opinion before signing.
Equally you may need to consider creating a contract for your clients or models to sign. Be sure to cover anything you deem necessary such as; payment demands, copyright issues, details explaining that you may wish to use the images to promote your business etc. Again, having an objective pair of eyes – or even a legal representative check over the document will be incredibly helpful. There are hundreds of templates online that are available to use and mould to suit your own business, just find something that suits what you are attempting to achieve.
Knowing how, what and when to invoice can be confusing at first – but there are many templates online that you can use and change to suit your business, but essentially invoices can be as simple as stating your contact details, addressee details, a quick description of the work done, fee and details of when payment is due. Be prompt and organised when it comes to getting paid – otherwise you won’t eat. Keep a detailed spreadsheet in digital form as well as backed up with a paper copy and chart when you dispatch invoices and receive payment.
Join us for Part 3 when we will discuss marketing and brand building concerns. Subscribe to dPS to make sure you get it.