Artists and craftspeople, like any other person living and working in the UK, have to ensure they pay the correct amount of tax on their earnings.

On June 10, the newly-elected Government will begin to plan its legislative programme for the next five years.

Reading last month's Page Two (Art Monthly No. 74) contribution by Jennifer Oille, reporting the apparently unfair and inequitable treatment of artists under Canadian tax laws, stimulated some comparison with our own regime; sharing these thoughts might prove interesting and informative.

Value Added Tax (VAT) is an indirect tax charged on many goods (including works of art) and services that VAT-registered businesses provide in the UK.

Because of the unique nature of every practitioner's financial circumstances, it has seemed impossible over the past nine years to address, in a meaningful way in this column, one vital issue.

It is sensible 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.

Accountants help you prepare your taxable accounts for HMRC, help you calculate how much tax you need to pay and can certify that their calculations are correct.

'Any government, whatever its political line, should take some active steps to encourage the arts.

This first column of 2008 responds to many readers' requests to explore  key business issues faced by both artists and art business professionals conducting their practices/businesses internationally.

Earning money is probably the most certain way for artists to support their practice, whether through freelance work related to their career or jobs in other areas.

There are an increasing number of overseas bursaries and other opportunities for artists, and with these come the prospect of earning a living as an artist outside the UK.

If you are registered as Self Employed once a year you will need to fill in a tax return – or Self Assessment form, in the HMRC jargon – to let HMRC know how much you have earned, how much your deductions are and what profit you have made.