The Death of Chatterton, by Henry Wallis
The second you start earning money from your writing, you're in business. Like it or not, that means keeping records. Writers earn a lot less than you might think—see here for the bad news—but while your dreams of sealing a deal worth millions may have to go on hold, HMRC and the IRS wait for no author.
It's better to get a basic system of recording the amounts of money you handle well before you need it, so here are my four top tips for shrinking a painful process...
THE RULE OF HALVES
Romance writer Kate Walker gives some great advice to new writers: whatever you earn, however small the figure, put half of it straight into a separate account that's hard to access. Don't touch it. WHATEVER THE TEMPTATION. That way, you build up a fighting fund ready for the moment an envelope full of the Tax Dragon's finest drops on your doorstep.
|All Contributions Gratefully Received http://bit.ly/1GQPIIq|
Take twelve large, plain, white business envelopes. Label one for each month of the year. Every time you buy stationery, pay your RNA or RWA dues, renew your web hosting, get an advance or some royalties, put the receipts, invoices and all other paperwork in the appropriate envelope. Take a note of any insurance premiums, your utility bills and business mileage, too. Tax planning and writing are alike in that it's better to collect too much detail to begin with, rather than not enough. If The Powers That Be want to pick and choose what they're interested in, then they can. Whether you're dealing with receipts or words, producing extra to order and at short notice is always a nightmare. Less is most definitely not more when it comes to tax planning.
...tax thresholds and bands long before you need to know about them. That way you'll avoid any nasty shocks. If you have no income other than from writing, contact your local library or check on line for reputable sources of free advice, such as the Citizen's Advice Bureaux. Yes, it's possible to do your own tax returns if they're simple, but as soon as you possibly can, pay an accountant to do them for you. They spend their whole working lives keeping up to date with the latest legislation, and can pay for themselves by spotting things you might miss. If nothing else, they'll have professional liability insurance to cover any mistakes they might make. Your cousin's friend who "always does his own books and can do yours, too" isn't likely to have that. He may be setting himself (and you) up for a self-assessed disaster.
DO IT NOW!
|This is the carrot. The tax office holds the stick.|