A group of published UK-based authors and illustrators of picture books, children's and YA.
Newcomers to the writing scene may perhaps be fooled. When you read the phrase ‘writer’ and ‘business’ in the same sentence, it’s all too easy to jump to the conclusion that I mean the very important business of which pyjamas to wear into the Writer’s Cave today, methods of ensuring the supply of coffee doesn’t run out midway through a tricky scene, or even how to convince family and friends that when you’re staring fixedly into space for half an hour you are, in fact, still working, and now is not the time to begin telling you all about the disastrous cake at aunt Caroline’s charity coffee morning.
It’s true that most of us like to maintain an elaborate fantasy in which we’re fluffy, flakey creatives who couldn’t possibly be expected to keep track of income and expenditure, or understand taxes. But in reality, if and when you become a published writer, you will at some point need to start thinking of yourself as a business (to a certain extent – don’t turn into a soulless, faceless, profit-obsessed monomaniac… unless you enjoy it, I suppose). Otherwise you will not only find yourself in all kinds of unpleasant money and legal tangles, but you may miss out on opportunities or entitlements which could be yours.
You see, if you’re a business (as well as a creative individual) then you have value. Others may chose to invest in you – which is ultimately what publishers are doing when they offer you a contract. It doesn’t mean that you need to transform into Alan Sugar. It does mean you need to get a handle on what your responsibilities and resources are, and the sooner the better.
First of all, when you start turning a profit from your work – that is, when the income you are receiving from your work exceeds the outgoings required to produce it – you will need to register as self-employed. It’s not an arduous process, although for anyone whose only dealings with tax so far have been having their money deducted at source through PAYE it can be a little intimidating at first. I’m informed that the service isn’t so great now as it was (many long years ago) when I used it, but the HMRC still have a Newly Self Employed Helpline which is supposed to be there to offer you support and guidance.
Next up – do you have MS Office or some other office software that includes a spreadsheet function? Do you understand how to set up and maintain spreadsheets? If yes, then you have a great advantage on many writers, and you should immediately set up a spreadsheet for income and expenditure related to being a writer.
If NOT – and for the record, although I have MS Office I can’t figure out spreadsheets unless someone else sets them up for me – then you will need to set up some kind of document whereby you separate the page into two columns. In the first, faithfully record every payment that you receive related to writing. And that means everything, including £4:50 for selling someone a spare copy of your book. In the second column, equally (if not more!) faithfully record every single expense related to writing, including, you’ll be happy to hear, money spent on books, stationery, research, and travel expenses.
Do not wait until the end of the month. Do not tell yourself you’ll do it later when things have calmed down a bit. DO IT NOW. This instant. Set it up on your Smartphone if you have one. Perhaps you have an amazing memory and think that it’ll be no big deal, in a couple of weeks, to remember to add that £66.30 you were paid for a school creative writing workshop or the £2.80 you spent on postage, but I assure you that when there are a handful of varied, often small amounts coming in and out each month, you will forget something. I promise. Write it down now.
If you’re not running a spreadsheet which will tot up totals for you as you go along, this is going to look like a lot of scary numbers. You can help yourself by adding up the totals yourself once a month and noting down the running total right there in the column so that when you come to the end of the tax year you’re not having to add up twelve months worth of expenses in one go.
A helpful hint: even if your first profit from writing came in during some other month, like June or even December, it’s most convenient to ensure that your records start on April the 5th so that they run parallel to the tax year, and finish on April 4th. You can do this by going back to April and looking at your expenditures for writing from that point and noting them down in the second column. Use your bank statements, Ebay and Amazon order history to jog your memory on what you spent.
Also invest in a file box like this, preferably one with twelve dividers (one for each month of the tax year, from April 5th-April 4th). Label them for each month, and when you’re out doing shopping and you buy some pens, or a magazine with an article that might be useful for your new book, or pay for a taxi/bus/train home from a book signing, make sure you get a receipt and tuck it safely into your purse or wallet. Then when you arrive home, put that receipt into this month’s section. It’s also a great idea to print out Amazon or Ebay or other online invoices and do the same. You’re supposed to keep these for five years, believe it or not, to back up your records for the HMRC. If you forget to keep or ask for a receipt, HMRC will accept a ‘contemporary note’, which means you should write down what you spent, when, and on what, on a piece of paper and sign it, and put it in there instead.
These things are important because once you’ve registered for self-employment you’re going to need to do self-assessment. This is where you fill in a tax return showing the HMRC what you’ve spent and earned via writing each tax year and then they tell you how much tax you owe them. Nowadays they also collect your extra National Insurance contributions this way as well. For many of us, especially when starting out, this is a tiny or even non-existent amount. However, if you have another job then often this will use up all of your tax-free allowance, which makes it more likely you’ll be paying out tax on your writing earnings.
Some writers, perpetually skint and brought up to consider paying other people for a job they can do themselves to be lazy and shameful, will actually do the self-assessment tax return themselves, even if it causes them to lose about a million braincells through stress each year (that’s me, for the record). Others, especially those who have a day job or started their careers with a decent advance, will prudently engage the services of an accountant (best to get one who is experienced in dealing with other writers through, since there are a lot of loopholes and codicils related to creative work that the average accountant may be unaware of). In either case, you will need these records of income and expenditure (generally known as your accounts) and receipts so that you or your accountant actually has the information required to fill in the online tax return.
Now for some more cheerful stuff! Public Lending Right is the author’s statutory right, within the UK, to receive a small amount (about 6p most years) each time a copy of their book is borrowed in the UK’s public libraries. The moment that your book has been officially published you should register for this. Most writers don’t receive a huge amount from it, but the more books you publish the more it adds up, so make it a habit to register each new book as they come out, including any large print or reissued editions which have a separate ISBN.
There’s also the Authors Liscensing and Collecting Society, which works in a similar way, but gathers up payments for all kinds of other uses for your work – say, teachers photocopying a bit of your book for a class, or quotes from your work that might be used in academia. Again, it’s not often a huge amount, but it covers not just UK but also foreign editions of your work. The ALCS does charge to join and they also take a percentage of the money that they collect. However, if you register to become a member of the Society of Authors – which, if you can afford it, I recommend that you do as quickly as possible as soon as you have a publishing contract – then membership to the ALCS becomes free, although they still take their percentage from the money they collect.
On the topic of the Society of Authors: once you’re a member you will have access to all kinds of resources, including a series of useful, downloadable guides which offer a lot of detail about all kinds of writing-business-related subjects which I’ve glanced on here. You’re also entitled to free legal advice, such as contract vetting, which can be very helpful. The Society also runs The Author’s Foundation, which offers grants to writers who have a publishing contract or a history of published work, in order to help them with research costs, or buying time to write.
The Arts Council also make grants to writers – through the Grants for the Arts programme – of between £1,000 and £15,000. These are for artists who wish to develop their careers or skills, need to buy time to write, or want to do research that they otherwise couldn’t afford. You’ll find it easiest to access this if you’re already published and have a publishing contract in place, but there are exceptions.
If you’re a writer in trouble – perhaps you’ve lost your day job, suddenly become a carer, or had a vital source of writing income unexpectedly fall through – then there is help available to you through the Author’s Contingency Fund (again, run through the Society of Authors) and through the Royal Literary Fund, who can make grants to help writers gain a little breathing room or to solve their immediate financial emergency. Again, you usually need to have a publishing history, and not all writers can be successful in applying to these, but it’s often worth a try.
Finally, have you ever thought about Tax Credits? They’re not just for people with kids – if you’re working full-time but your household income is below a certain level then you may be entitled to these (even if, like me, you are happily childless). Work through the Tax Credits Calculator and find out, then phone up for an application form.
One last piece of advice from me: don’t hesitate to apply for things that you may be entitled to, like Tax Credits or grants, based on the (rather British) belief that you shouldn’t put yourself forward, or that your ‘hobby’ isn’t worthwhile. So long as you’re honest about what you’re doing and earning you will not get into trouble for asking, and if you DON’T ask, then you won’t ever get. The worst anyone can do is say no. So be brave, be organised, and embrace writing not only as a vocation, but as a career.
Phew. I hope this has been helpful, duckies. If anyone can think of any resources I’ve missed, please do feel free to toss them in the comments 🙂
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YA novelist Zoë Marriott lives on the bleak and windy East coast of Britain, in a house crowded with books, cats, and an eccentric sprocker named Finn (also known as the Devil Hound). Her folklore and fairytale inspired fantasy novels are critically acclaimed and have been nominated for many awards, even winning a few, including a USBBY Outstanding International Book listing for The Swan Kingdom and a Junior Library Guild Selection and the prestigious Sasakawa Prize for Shadows on the Moon. In 2015 the release of Frail Human Heart will complete her epic urban fantasy trilogy, The Name of the Blade, a tale of Kitsune, Kami and katanas. Zoë is proud to be represented by Nancy Miles of the Miles Stott Children’s Literacy Agency.