Being a student, I don’t have any type of tax return, however after I graduate I will have to contact the HMRC to declare myself self employed. This is because I do not work for someone else, I will not have a secure 9 - 5 job, the people I shoot for will pay me a one off payment, and this amount up over the year and I will have to declare how much I earn to know how much to pay back to the Government. For me, this is quite concussing, so I will a table to work out all of the numbers.
There are three different ways I can identify myself as a working, professional photographer,
Sole Trader
This is the most common way photographers and most creatives work, you have complete control over all of your actions and those you work with. The money I would make from this go the Bailey Kidd Photography, and not me. It is important that I set my prices so that I meet my out going cost, other wise I will make no profit. Most importantly, just because Bailey Kidd Photography is not my own account, I am still liable for any and all debts the company come across. All images belong to me.
Partnership
This is a very similar way to set up a business as a Sole Trader, but everything is split between myself and another. It would be a good idea to set up a business with someone with a different craft, for example a writer to set up a publishing site, or a Geographer for a travel agents. It is also a good idea to write our a proper, legally binding contact incase the company ever folds.You will then have a clear ruling about the equipment brought and content created. Copyright is tricky in a partnership, it is important to straighten out these aspects before you even start the company.
Limited Company
Any companies started under the Companies’ Acts are treated separate legal entities in their own right, this means you can reclaim expenses if the proper documents are kept. Some benefits of setting up as a Limited Company is that you can work as an employee taking a monthly wage. However, forms needs to be filled out for every purchase, it is a lot of work to run your own limited company, I do not think this is the route I will go down after I graduate. All copyright belongs to the company, unless a legal document is written up beforehand.
Copyright
VAT is charged on everything we buy, the percentage changes but right now it is set at 20%, this 20% is reclaimable by Sole Traders who register for VAT return online. The compulsory registration turn over is currently set at £85,000, this does change each year, it was £83,00 in 2016 so it is important I regularly check.