Are you a beginner tattoo artist in the UK and wondering ‘is tattoo artist self-employed’? The market for tattoo artists is getting bigger because people are inclined towards tattoos to beautify themselves. This brings in a demand for more tattoo artists in the UK. But is a tattoo artist self-employed? In this guide, we have outlined some important factors in this regard.
This will help you to be clear about their employment status and act on what it takes to be a self-employed tattoo artist. So, let us get started with the discussion and gather more information on is a tattoo artist self-employed.
Need Help or Have a Query? Get in touch with our professionals at AccountingFirms. Connect with the Best Accounting and Tax Experts near you in just 3 minutes – Register now for Free!
Is a tattoo artist self-employed?
In the UK, tattoo artists often operate as self-employed individuals, but this status can depend on various factors. To determine if a tattoo artist is self-employed, we need to consider their working arrangements, contracts, and tax obligations.
Many tattoo artists in the UK work as self-employed freelancers, renting space in tattoo studios or operating their studios.
Requirements for Self-Employed Tattoo Artists
Requirements for self-employment in tattoo artistry include the following:
- Setting own rates and schedules
- Choosing clients and projects
- Managing finances and taxes
- Responsibility for equipment and supplies
What is the Financial Responsibility of a Self-Employed Tattoo Artist and why do they need Accountants?
Being a self-employed tattoo artist comes with managing financial responsibilities. This includes the following.
1- Financial Record-Keeping
- Maintaining accurate and up-to-date financial records
- Tracking income, expenses, and business-related expenditures
- Separating personal and business finance
2- Tax Obligations
- Registering with HMRC as self-employed
- Filing annual Self-Assessment tax returns
- Paying income tax and National Insurance Contributions (NICs)
- Completing VAT returns
3- Business Expenses
- Claiming allowable business expenses like equipment, supplies, and travel
- Calculating business use of personal assets like car, and home
Moreover, the role of accountants in this regard can be supportive if the self-employed tattoo artists hire one. Following is an explanation in this regard.
1- Optimised Financial Performance
- Maximising allowable business expenses
- Minimising tax liabilities
2- Time-Saving and Reduced Stress
- Outsourcing financial tasks and responsibilities
- Focus on your core business: tattoo artistry
3- Business Growth and Planning
- Financial forecasting and budgeting
- Strategic business advice
4- Compliance with Tax Laws
- Accurate tax returns and payments
- Avoidance of penalties and fines
What are the Tax Obligations of a Self-Employed Tattoo Artist?
As a self-employed in the UK, understanding your tax obligations is crucial to avoid penalties, fines, and financial stress. Here’s a comprehensive guide to help you navigate your tax responsibilities.
1- Registration with HMRC
Within three months of starting your tattoo business, register with HMRC as self-employed using form CWF1 or online through the website.
2- Self-Assessment Tax Returns
File annual Self-Assessment tax returns (SA100), declaring your business income and expenses.
3- Record Keeping
Maintain accurate records:
- Business bank statements
- Invoices and receipts
- Expense logs
- Tax returns and payments
What tax does a Self Employed Tattoo Artist Pay in the UK?
As a self-employed tattoo artist in the UK, you’ll pay various taxes on your business profits. Here’s a breakdown of the taxes you’ll need to consider:
1- Income Tax
- Pay 20% (basic rate) or 40% (higher rate) income tax on profits
- Tax-free allowance: £12,570
- The basic rate applies to profits up to £50,270
- The higher rate applies to profits above £50,270
2- Value Added Tax (VAT)
- Register for VAT if annual turnover exceeds £90,000
- Charge 20% VAT on services
- Claim VAT on business expenses
- File quarterly VAT returns
3- National Insurance Contributions (NICs)
- Class 2 NICs: £3.45 per week
- 6% on profits of £12,570 up to £50,270
- 2% on profits over £50,270
4- Corporation Tax
- Not applicable to self-employed individuals, but relevant if trading as a limited company
5- Capital Gains Tax
- Pay tax on profits from selling business assets like equipment or property
- Tax rates: 10% (basic rate) or 20% (higher rate)
6- Business Rates
- Pay business rates on commercial property for studio or premises
- Rates vary depending on location and property value
AccountingFirms makes it seamless to search for the best fit for your accounting and taxation needs by applying filters and getting the most customised result. Let’s hire the best accountant now!
The Bottom Line
In conclusion, discussion about ‘is a self-employed tattoo artist self-employed‘ can be overwhelming. Having a clear idea of whether or not a tattoo artist in the UK is self-employed, there are many factors to consider mindfully.
Once a tattoo artist in the UK is sure about his employment status, it will be easy to access the benefits but also keep compliance with tax regulations and increase income. You will get advantages in several ways.
This will keep you away from paying hefty amounts of fines and other penalties. You will be able to keep yourself far from facing unpleasant challenges and circumstances.
Disclaimer: The information provided on AccountingFirms.co.uk is for informational purposes only and should not be considered as financial advice. Always consult with a professional accountant to ensure compliance with UK laws and regulations.