Current research shows that artists and image-makers are three times more likely to be self-employed or start their own micro-enterprises than any other sector of the UK population. The fact is that very few artists make a living purely from sales of their work. In order to function as a professional artist, you need to be able to manage your finances. A good way of doing this is by acquiring self-employed status.
Many artists make a living from a mixture of sales, commissions, workshops, teaching, arts administration, residencies and other creative work. Establishing your practice and gaining recognition is aided by being able to legitimately charge for your artworks and other services.
Artists have nothing to fear from self-employment if they take time to understand how to go about it and keep appropriate records. Many artists find themselves better-off financially being self-employed, as it allows them to grow a business and apply for short-term opportunities. Organisations such as local authorities, arts organisations, creative firms, galleries, schools and colleges cannot legally pay artists unless they have self-employment status. Otherwise your 'employer' will have to deduct emergency tax at source which can be a difficult and lengthy process to get back from HMRC (formally the Inland Revenue). An added bonus is that artists can claim back a huge amount of expenses against their tax bill by simply keeping receipts when purchasing materials and services necessary to their artistic activities - you might end up not paying any tax at all on your income.
Despite the benefits, registering as self-employed (as a business) should not be rushed into. Many artists survive on a mixture of benefits and part time work, and stepping into official 'trading status' is a big step.
Remember: it is perfectly legal to be an 'employee' of an organisation or company (e.g. having a part or full-time job working in a shop or restaurant) and continuing to work self-employed outside of employed work.
Many creative people actually rely on a small, regular income from a job that enables them to build up alternative sources of income. It is useful to have a part-time job during the first years of trading for increased financial support whilst establishing yourself as an artist.
From the moment you decide to register as self-employed, it is a good idea to allow some time before commencing; this is called the 'pre-start-up' period and could last between 8 and 12 months. Registering as self-employed is relatively straight forward, though you need to fully understand the process, see Step Seven: Registration.
Research thoroughly how you might become more economically successful. This can be achieved by developing commercial skills or products, exploiting your copyright, extending your skills, and working in temporary jobs. Understanding your entitlement to relevant benefits and working tax credits, see Step Two: Cash Strapped.
Many artists are still able to successfully sell their work from galleries for the collecting or residential market. Making commercial art does not suit every artist (or their work), and many generate further income from other creative sources such as workshops, residences, community arts, teaching, new technology, working with businesses, arts administration or management. It is worth bearing in mind that very few artists thrive on gallery sales alone. If your work is poetic in nature then you may find it difficult to generate a decent livelihood from sales of your artwork alone.
It is worth gaining experience of different income generation activates and finding out about related work opportunities. Joining professional organisations, networking, e-newsletters and jobs mailing lists are vital sources of information. (See end of this section). Ask other artists and creative professionals how they make a living. Often you will discover that there is no need to 'reinvent the wheel' for yourself.
You may find that although you have art qualifications you also have 'skills gaps'. This can be disheartening, but don't panic. Spend some time deciding what other skills or qualifications you need. It may be appropriate to undertake Professional Development courses in your subject area (for example learning about arts management or administration), this can increase freelance work opportunities.
You may discover that learning how to design websites, use digital and 3D modelling software, or understand animation techniques will be relevant to your activities.
A popular option is part-time lecturing or teaching. You will now find an arts degree or diploma is rarely sufficient to teach at adult level within colleges. It is advisable to contact the college you would like to work for, and check with the Art Faculty and Human Resources Department which credentials they accept or if they offer new employees appropriate training? This is worth doing as there are numerous teaching qualifications.
To find out more about adult teaching courses see the city-and-guilds website, and look for City and Guilds 7407 Stage One and Two Adult Teacher Training Certificates as these are the most popular qualifications. There is also the Postgraduate Certificate in Education, a more advance course, see http://www.tda.gov.uk/Recruit/thetrainingprocess/typesofcourse.aspx.
A note of caution though, lecturers pay is minimal when compared to commercial salaries. Teaching posts when advertised attract a multitude of applications, so it is a very competitive field.
Once you identify potential income sources, you will probably need to expand your expertise by gaining employment in these areas. Many arts and community organisations (and galleries) welcome interns or people seeking work experience. Often you would be expected to work for free, but some offer expenses; organisations such as local council-run youth clubs offer a standard amount per evening to volunteers, and galleries generally provide travel costs. Occasionally, this kind of work can lead to paid employment. However it is arguable that there is a 'volunteer culture' within the visual arts. Be wise... find a balance of absorbing valuable experience without being taken advantage of.
Many arts organisations and colleges rely on temping agencies to fill short-term vacancies. Find out from the institution you want to work for, if they use a recruitment agency, then go and register with them.
It is an important fact to remember that updating your knowledge and skills is an ongoing process.
Useful Books and Resources
The Artists Year Book, Thames and Hudson.
Fantastic Resource Book for Visual Artists
Why are Artists Poor? The Exceptional Economy of the Arts
Hans Abbing, Amsterdam University Press
Good background reading to develop broader mindset
The Artist's Guide to Selling Work
Annabelle Ruston, Black/Fine Art Trade Guild
This is a brilliant book for any painter, printmaker, photographer or sculptor wishing to approach and sale through galleries and art fairs.
London Art and Artists Guide
Heather Waddell
www.hwlondonartandartistsguide.com/books.htm
E-newsletters
Links for Arts News and Arts Jobs www.artscouncil.org.uk
To register for Arts Digest www.artsadmin.co.uk
Enterprise Centre for the Creative Arts www.ecca-london.co.uk
Legal info www.own-it.org
City Lit
Centre for Teacher and
Management Training
t. 020 7492 2537
f. 020 7492 2739
e. pd.training@citylit.ac.uk
w.www.citylit.ac.uk
Contact them for information about introductory, level one and two adult teacher training qualifications.
Before starting the process of business start-up we need to think about money.
Firstly if you find your debts are getting out of control, thus affecting your credit rating and you would either like to seek help in managing them or find a route out of your problems via a debt-release programme, such as IVA (Individual Voluntary Arrangement), then contact the Debt Helpline for free advice. It is wise to be on top of fiscal matters before you start a business.
Secondly if you find you are unemployed or are in work (either employed or self-employed) less than 16 hours a week you may find you can claim state benefits such as Job Seekers Allowance and Housing Benefit. You can be registered as self-employed and gain benefits. Obviously this is not an ideal situtation and you must declare to your Job Centre Advisor what you have earned and how. The government are letting benefit claimants on all state related benefits including incapacity benefit earn a reasonable sum a week on top of this income. You may be quite surprised about this and it is worth contacting your local Citizens Advice Bureau or calling the Social Security Helpline Public Enquiries: 020 7712 2171
If you are unemplyed, find out from your local Job Centre whether there are Enterprise Schemes worth joining in your area. You may need to have been unemployed and claiming benefits for six months before you are eligible for such schemes, but do ask even if you have only been claiming for a short time. These schemes are not targeted at artists and have a general approach to delivering information. Trainees on these schemes can earn money whilst claiming benefits, acting as a stepping stone from signing on to trading status.
It is advisable to fill in your 'skills gaps' (see Step 1: Research) by doing some part-time courses before signing up for an Enterprise Scheme; while setting up you will discover a few other things you need to learn.
Thirdly if you are in work for 30 hours and over a week, for instance a mixture of employed and self-employed, you may find you are entitled to Tax Credits. These can be claimed if you income is low. If you are aged 25 + (with no children) you can claim Working Tax Credit. If you are 18+ either alone, with children or living as a couple you may find you can claim Family Tax Credits. To give one example you may be aged 25 and have no children, have a job for 14 hours a week, and be self employed (including research and making time) for 16 hours a week or over, then you would qualify for working tax credits. If your income is under £10,000 you may find you are entitled to an extra £20 a week.*
You can claim if you are single or as a couple, as long as one of you is a UK or EU citizen. If you are from a country outsied the EU, you may still be eligible, contact the Tax Credit Help Line to find out more.
*Note, if you are on benefits (e.g.Housing Benefit), speak to either your local Citizens Advice Burea and the Tax Credit Help Line for more detailed information before making a tax credit claim.
Tax Credit Help Line
Tel: 0845 300 3900
www.direct.gov.uk/doesitworkforyou
www.hmrc.gov.uk/taxcredits
National Debt Help Line
Tel: 0808 808 4000
www.nationaldebtline.co.uk/england_wales
The UK Insolvency Help Line
Tel: 0800 074 6918
www.insolvencyhelpline.co.uk/debt_solutions/iva.htm
Whether you are receiving benefits or not, it will be useful to follow this step.
Contact your local enterprise agency, to find your local one either phone Business Link on 0845 600 9006 or visit the National Fedaration of Enterprise Agencies website. Please find a list of supportive business organisations in the Advisors Section, Creatvie Business.
Enterprise Agencies, some of which are creative industry focused, can offer free training and advice to start-ups. Some even distribute funds. It is highly advisable that you attend a short course or seminar at an Enterprise Agency about the issues in setting up before you register. If you are claiming benefits, Enterprise Agencies can still help you.
When you decide to go freelance/self-employed you will need some basic knowledge of marketing, accounting, financial matters, tax issues and invoicing. Learning other practical skills such as negotiation and selling are vital. You also need to find out about legal areas such as copyright, contract law, artist resale rights, e-business regulations, trading standards, insurance, licences and health & saftey. This is why seeking advice is vital, not only in the beginning but also during your business career, from accountants, business advisers and solicitors. Valuable experience can be gained from artist mentoring schemes that run periodically, see Creative Capital. Please visit the Artlaw section of the Artquest website for more detailed legal information and useful links and articles.
If you are starting a business you will also need to write a business plan.
Writing a business plan may seem rather irrelevant to the notion of artistic endeavour, but it will make you think through your ideas and identify weak points in the future before they become ingrained in your business. Think of it like this; you wouldn't start a journey without planning a route, arranging stop-off visits and acquiring money and food. A business plan is like planning for the journey you are about to make in commerce, and it pays to think about it carefully and thoroughly. It could take between six and twelve months to develop one properly. Don't let the thought of this put you off - many artists and craftspeople develop a new insight to their practice and creative abilities through undertaking this process.
The business plan must demonstrate, market/public demand for the artwork or services, sound research, promotional strategies, an understanding of legal matters, costing, pricing and financial planning for at least twelve months.
During this time you will establish what kind of business you are going to be. For example, you may be a sole trader (individual), a partnership (two to fifty people), a co-operative or a limited company. There is more information on how to set up an organisation here, and business related legal advisors are in the Legal Advisors section.
There are many useful business start-up courses run by local colleges and universities targeted at creative people. Courses at ECCA, the Enterprise Centre for the Creative Arts, Central Saint Martins College of Art and Design on the interdisciplinary section of their website or telephone them on 020 7514 7015 for information on short courses for business start-up, Chelsea College of Art and Design and City University are all recognised as being helpful. There are also established arts advice organisations that provide free or inexpensive courses for artists such as Artquest (advertised through our Artquest Training and Events pages), Space Place, ACAVA (Tel: 020 8960 5015) and Shape. For more providers, see our Short Courses listing in Training.
If you are under thirty years old, contact Shell Livewire as they can assist you in the research and funding of your enterprise. The Princes Trust is focusing on helping people with low academic achievement, however they may still be able to help you if you are in difficult circumstances or have a disability.
Funding for business start-ups can be difficult to find, but with a little research it is not impossible. The Arts Council jave awarded successful appilcants with grants for items such as equipment, travel, research and promotional materials. The Crafts Council's Development Award (formerly the Setting up Scheme) supplies financial and business support through an open submission application four times a year (see www.craftscouncil.org.uk).
However the grant culture is not suitable to the nature of enterprise, as business is about making money. Often free money is very handy, but only if it leads to successful economic activities. This is why you need to write a business plan to demonstrate how investment will generate profits. Enterprise is supported by loans, with the idea that the lender gets their money back with interest. There are loan providers in London that comply with Sharia Law, such as The Islamic Bank of Britain and most Credit Unions.
Avoid taking out bank or credit agency loans to avoid debt early on in the business's life unless absolutely necessary. If need be, use savings or ask family for support. If your family can assist you, try to make a formal arrangement to repay them within a set time-period. It must be clear whether the money is a gift or they expect to be paid back! However, borrowing from family members may not be an option. Look over the rest of theis section for other ideas.
You can start a business up from scratch using almost any amount of savings. It is advisable to have at least £1,500-£3,000 in the bank before you launch your business. When you first start trading you may find you don't make very much money as all you profits are going into promotion, equipment, tools or other start-up costs. Do not underestimate how expensive setting up a business can be; it is not unusual for sole traders and partnerships to make tiny or no profits for the first few years, see the Funding section for more details and links.
There are several options open to you. After opening a business account at a bank you could apply for a business loan, you will need a business plan and indicate you will be investing money also. It is advisable to use their business planning software rather than your own version. You could approach your local Credit Union instead. These are community banking schemes that can offer low interest loans (3-6%) for a few months or years. You can find out where your nearest Credit Union is through your local enterprise agency or check with the ABCUL (Association of British Credit Unions) . If your application is rejected then there is a programme run by the GLE (Greater London Enterprise) where loans and assistance with business planning is offered.
Artquest Provides lists of wide ranging loans and grants withing the Funding section. Cross-reference these to Opportunities, specifically the Deadlines section.
Once you are happy with your business plan you will be ready to approach a bank to set up a business account. Explore the incentives offered by each of the high street banks, and check internet banks and building societies. Walk into any branch and they will give you a binder or folder with useful tips on self-employment and a CD Rom with a business plan outline for free. Many high street banks now also offer free personalised business set-up advice. (Though they may not understand the complexities of the Visual Arts).
It is worthwhile noting that some high street banks do not charge for 'managing' your business account for the first twelve months. The finance sections of newspapers also offer good advice on bank, money and comparative deals such as the Guardian's Money pages.
It is not compulsory to have a business account in order to be self-employed and run a business. Transactions can be carried out through your personal bank account. However, it is more professional to have a business account and gives you a more credible status and it is easier to seperate your business and personal expenses. Trading out of one bank account can get confusing.
You are more likely to be successful in your application for a business account if you do not require overdraft facilities, and you have the support of your local Enterprise Agency. Usually you just walk into a local branch and ask to open an account or apply via their website. You will usually need a business plan (including images of artworks or products) or evidence of trading such as accounts, promotional materials or letter headed paper. It is now the case if you are on the electoral role and have a good credit rating you can open a business account online or over the phone without the need for any evidence.
If you are worried about your credit rating you can check it via www.experian.co.uk. Unfortunately a poor credit rating can penalise you form setting up a business. However Natwest offers a business account to customers with poor credit rating, ask for details about their business 'Direct' account.
It is advisable to have a meeting with an accountant before you start your business. They can talk you through setting up your accounts and advise you about reclaiming expenses from taxable income. You might be able to gain free access to an accountant through your Enterprise Agency. For a short list of London accountants and more information see the Tax, Pensions and Accountants section in the Money Section.
Make sure you hire an accountant who is a specialist in the arts or cultural industries and that they have passed some exams. Seeing a good accountant saves you time and money in the long run. Seeing a 'mate' who once did book-keeping course is not the same. Accountants will often offer an initial consultation for free. When selecting an accountant, research carefully into their rates and find one to suit your budget.
You will find it best to learn about book-keeping and the basics of how the tax system works. There are short course provided my Enterprise Agencies and Local Adult Education Colleges. There are useful mimi 'teach-yourself' accounting guides available from any bookshop, publishers include Lawpack, Hodder Education and Study-house.
To check accountants' qualifications and what their specialist areas are, contact the following organsiations:
Chartered Accountants Directory London Central
Holds lists of accountants who have passed 'chartered' examinations in London.
The Institue of Chartered Accountants
Tel: 020 7920 8100
London Society of Chartered Accountants
Tel: 020 7556 7053
The Association of Chartered Certified Accountants
Tel: 020 7396 7000
Now the great moment has arrived. You can register by phoning the Newly Self-Employed Help Line (Tel: 08459 15 45 15) or by post by filling in a yellow booklet known as 'SE1'.
Alternatively you can download the resgistration form also as a PDF from the HM Revenues and Custmons website. just type 'CWF1' into the 'Search Box'. Then print off the blue form, fill it in, keep a photocopy and post the original back to HMRC.
You will need a National Insurance Number if you don't have one contact the HMRC and the will make an appointment with you; it is a straightforward process.
Then using the website you can either register for Class Two National Insurance (£2.20 a week), by downloading a peach coloured PDF form from the HM Revenues and Custmons website by typing 'CA5601' into the Search Box. However if you don't think your profits over a year will be more than a few thousand pounds then you can apply for 'Class Two NI Exemption certificate' which you can download by typing 'CF10' in the Search Box. So either you decide to pay the contribution or be exempt, but you can't do both!
Note: If you are from a acountry outside of the European Union you may have aproblem with trading in the UK. Currently there are very tough regulations on Non EU Citizens trading in the UK linked with student and work visas. It is advisable to see the advice of a good immigration solicitor before contacting the Home Office.
Within a few weeks you will then be given a self-employment number (aka Tax Reference) that will enable you to sell your work legally and trade as a freelancer on commissions and short-term contracts. You should quote this numer on all your invoices (bills of sales) to purchasers of your products and services.
Upon registration, ask about the Business Support Team (Tel: 020 7667 4827/ 4828/ 4829/ 4830). They give free advice, training and one to one advice on tax, self-employment issues, statutory requirements and all the rules and regulations governing self-employment. They will offer you a personal advisor and also offer an extremely useful publication entitled 'Cutting Through the Red Tape,' an easy to use guide for running your business.
In addition find out about your local tax office. Many area offices are quite approachable and will answer queries on tax issues and assist you with filling in your self-assessment forms (aka A Tax Return). It is worth giving them a call and letting them know you will be registering.
For more information about HMRC tax and self-assessment help lines see Tax, Pensions and Accountants
Other Useful Links
Medi Visas
These are immigration solicitors, they offer a free consultation. The Medi Visas website also explains the regulations concering the rules about visas and the tough new ones regarding trading for Non European residents.
Tax Aid
Tel: 0845 120 3779
A charity offering tax advice to those who cannot afford professional fees, remember this organsiation, they could be useful.
If you are claiming benefits before you start trading, and/or have a part-time/full time job, you can request 'Housing Benefit Run On' (see the DWP website for more details on Houseing Benefit Run On). This entitles you to one month of Housing Benefit/Council Tax payments after you have signed off. After that you are on your own for a while. After a few months, if you are still on a low oncome you can apply for Housing Benefit/Council Tax Relief again, (even if you are self employed).
If you have not claimed this benefit before you may be entitled to it. You will have to send in your accounts, and may need to do so every few months throughout the first year.
Once you have filled in a 'self-assessment form,' you will receive a letter from HMRC stating the amount of money you have earned. This is your profit only (income minus the expenses of running a business) and will happen every year.
You can send a photocopy of this document to your Housing Benefit office and they can make a future assessment based on this document. Claims can months to sort out so be prepared to wait. It is possible to run a business for a few years claiming full or or partial Housing Benefit/Council Tax Relief. Housing Benefit is not a taxable form of income, so it does not count against you in any way if you need it claim it.
Please don't forget Working Tax Credit, Child Tax Credit and Family Tax Credit don't forget if you are in work, either self employed, or with some employed work for 30 hours or over and are on a low income then you might be entitled to extra payments from the HMRC
Useful Contacts
Department for Work and Pensions
Public Enquiries Tel: 020 7712 2171
Email: peo@dwp.gov.uk
Tax Credit Helpline
Tel: 0845 300 3900
Make sure you have good quality marketing material. Don't scrimp on this area of your promotion. Presentation is the one of the keys to generating money from your creative abilities. Striking images and good identifiable design is important for your business cards, postcards stationary, invoices and website (if appropriate). Do not make your own business cards. Get them professionally printed.
If you can afford to, join the Federation of Small Business (tel: 01253 336 000). It costs £100 for the first year and £70 thereafter. This organisation offers a range of complimentary services including 24 hour legal and tax advice, legal cover and good value deals on insurance.
Keep learning about self-employment, purchase a few books from the Useful Publications section. Go to business conferences, attend seminars and courses on professional development and enterprise training that are featured through the Artquest site and AN websites. It is good practice to keep updated with developments and meet with your contemporaries.
You may decide it is appropriate to build a website with pages showing images of your work and use it to develop interest in your creative practice and services. Make links to showcasing sites and invest time in promoting it.
Vector Business Development
Produce inexpensive books on all areas of setting up a business written in plain English with practical information. Note general start-up guides, you will find no sector-specific information here. £8 - £10 each
Tel: 01329 845693
www.study-house.com/online_bookshop.asp
Sunday Times
'Creating Success' Kogan Page Publications
Publish a range of easy to read books on all areas of business including presentation and e-business. £7.99 each
Tel: 08701 658585
DTI Various Publications
Often free on all areas of business, only view list of publications and fact sheets on line.
Tel: 0870 1502 500
www.dti.gov.uk/publications
Craft and Art - The Business
By Elizabeth White
Elliot Right Way Books
A book about setting up a craft business and selling at art fairs.
Tel: 01737 832 202
Second Steps
For Designers and Makers
By Caroline Mornement
This business start-up for designers makers is recommended by the Crafts Council.
Tel: 01935 862731
www.bcfbooks.co.uk
The Artist's Yearbook
Thames & HudsonA fantastic resource book for Visual Artists
www.thamesandhudson.co.uk/en/1/home.mxs
Why Are Artists Poor? The Exceptional Economy of the Arts
By Hans Abbing, Amsterdam University Press
Good background reading to develop broader mindset
The Artist's Guide to Selling Work
By Annabelle Ruston, Black/Fine Art trade Guild This is a brilliant book for any painter, printmaker, photographer or sculptor wishing to approach and sell through galleries and art fairs.London Art and Artists Guide
By Heather Waddellwww.hwlondonartandartistsguide.com/books.htm
The Illustrator's Guide to Business and Law
By Simon SternPublished by the Association of Illustrators, will be out in Autumn 2008, £19.95
Though this is a book for illustrators focusing on contract law, it is the best book on the market tackling licencing contracts today and will be essential for visual artists.
www.theaoi.com
T-Shirts and Suits - A Guide to the Business of Creativity
By David Parrish This book is an introductory business guide to creative and innovative businesswww.davidparrish.com - free as a download