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Declaring Your Earnings From Freelance Writing!

April 25th, 2013

Declaring your earnings is a commonly misunderstood area with freelance writers. The bottom line is, if you are writing and getting paid for it, you will have to register yourself as self-employed and your earnings will, once you reach the threshold, become eligible for tax and national insurance contributions. This applies even if you are already employed by another company. In this scenario you’ll be registered as employed and self-employed too. And don’t forget, if you already earn over the tax threshold in your ‘day job’ you’ll start paying tax on your writing straight away.

This is important for our students in receipt of benefits too, as earning money for your creative writing will be classed as working, even if you only do a few hours. So, please make sure that you know what you can and cannot earn when you are in receipt of benefits of any kind.
Anyway, back to tax and national insurance. So, you have to declare all your earnings, and to do this effectively, you’ll need a comprehensive and complete list of all the work you’ve been paid for.

And, there are some items that can be offset against your tax bill, so you’ll also need invoices for sales and purchases, receipts for business expenses and bank records. In fact, in the UK it is a legal requirement for you to keep these records, so it’s best to get into the habit early on if you intend to make a living from freelance writing. There’s more advice from HMRC on record keeping here.

Now, when tax returns become due, all you need to do whip out your immaculately kept records and wade your way through the self-assessment form!

For UK freelancers, find more details about tax and national insurance and self-employment status on the HMRC website.

For overseas freelancers, find the rules that apply in your country.

Remember, failing to declare your earnings could result in you being fined, so it’s definitely worth spending a little time familiarising yourself with the rules.

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