How best to set up my photography business with regards to taxation?

Posted 28 July 2015 under Tax Q&A
Kat says:
29 June 2015 at 13:12

Hello Tax Tim I work as an analyst full time; and in my free time I follow my passion for music and photography and take photos at festivals, clubs, pubs and other events. I have been building up a profile over the past few years of my work and now I have artists and their relative management agencies showing interest in procuring some of my images.

I have not registered a company yet, nor have I sold any images as I first want to ensure I set up my "business" and contract documents correctly so my clients and I are covered fairly and equally. As I am only starting out; my initial income will be low and will hopefully grow over the next few years. However I already have a number of deductions which I am currently paying for personally, e.g. ADSL, PC, software, Camera gear, services, insurance, travelling, storage, domain, hosting, etc.

I am looking for tips on how best to set up my photography business with regards to taxation ?

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TaxTim TaxTim says:
30 June 2015 at 8:34

How much income are you receiving from your normal employment / existing job? Establishing a business has several tax consequences so we wish to determine if it is best set up as a company, or continue in your personal capacity.

Kat says:
30 June 2015 at 10:15

My current monthly income is as follows:
Basic (Gross) Pay: R48k
Total Deductions: R17k
Nett Pay: R31k

TaxTim TaxTim says:
30 June 2015 at 10:28

Given your income level it would make sense that you do not set up a company just yet as you will end up paying even more tax than if you declared this income in your personal name. Only when you are making about R400,000/R500,000 per year then it would make sense to set up a company. (From a tax perspective, there may be other issues though when deciding).

What you need to do is register as a Provisional Taxpayer and complete two extra returns a year. You also would need to keep records of all your business expenses made including all the items listed above in your question so you can deduct these against any extra income earned. You will then completed the Local Business section of your personal income tax return (ITR12) and put all your business income / expenses there.

We can assist you in completing your return when it comes time do so. Register for TaxTim and let us assist.

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