Thursday, June 08, 2006

Tax, Accountants and the Agent's 10%

“Tax doesn’t have to be taxing.”

So says Adam Hart-Davies on behalf of the Inland Revenue.

Hmm, you can see that the Inland Revenue is trying to generate a chummy approach with this advertising slogan but let’s face it, tax is taxing otherwise it wouldn’t be called tax.

I’ve had a couple of emails recently about tax, and what it means to be self-employed. There are a couple of posts from last year that touch on this, more significantly the post about self-assessment and what you need to do. There’s also the post about what you can claim once you’re freelance.

If you’re a self-employed writer, there are two essential go-to guys that you need in your corner. One is, naturally, your agent. Yes, it’s hard to get an agent. But you will. And he/she will be great and possibly guide you to your first accountant, the go-to guy number two.

However, something interesting is happening with the ying yang relationship a writer has with his agent/accountant. An agent will charge you 10% of your earnings and your accountant will write that charge off on your year-end return as tax deductible.

Dude. Sweet. And just. But no.

The Inland Revenue is beginning to think otherwise, and it's picking on Richard and Judy to see if they can reverse this 10% tax deduction, and worse, try to retrospectively claim back what you’ve written off.

“What? Scandal!” I hear you cry. Indeed. But check it out. Mark Huckerby sent me the link. It’s the Revenue’s skewed justification that slays me: “…whereas actors, singers, dancers and musicians have agents as a necessary business expense, other entertainers, sportsmen and authors do not need them. So they can’t claim that the percentage paid to the agent should be ignored for tax purposes.”

It’s a worry. At the moment, it seems like an amusing story line involving two well-loved TV presenters and their wealthy habits but, as Mark puts it, “if they lose, and the precedent is set, we might all be in trouble.” It doesn’t matter if you haven’t earned anything as a writer yet, if your agent’s 10% can’t be deducted against your earnings then future dealings and accounts will be even more stressful than they already are. Even more ways to screw the writer basically.


Dominic Carver said...

Money grabbing bastards!

Paul Campbell said...

Danny, are your financial affairs so complicated that you actually need an accountant, or are you just too darned lazy to sort it out yourself?

It's not hard. In fact, the hardest bit is digging out all the old receipts and bits and pieces. And you have to do that anyway in order to hand them over to your accountant.

Danny Stack said...


James Moran said...

Not hard? Have you seen the tax return form?? It's all boxes and things.

I'm sure it's not that hard, but I hate filling out forms, working things out, and staring at little boxes filled with numbers and trying to add things up. I'd only cock it up and pay the wrong amount, then they'd put me in prison for a million years.

Plus, I'm also lazy.

jula meadows said...

The Guild has issued a statement about this (agents fees being tax deductible, not Danny being lazy) which you can read on the website: