There’s no doubt history will record 2020 as an exceptional year. You could say, the use of the word unprecedented by the media has, in itself, been unprecedented. While the future is still uncertain for many of us, there are still some certainties in life. Like taxes.
With the January tax deadline looming, now’s a good time to review your financial documentation for your writing business. The various government support schemes for this financial year may mean you need to retain additional information for this financial year.
And as we hope 2021 brings a brighter future, now is also a good time to think about how our writing business might adapt in a post-Covid future.
Self-Employed Income Support Scheme
The Government’s Self-Employed Income Support Scheme paid out two tranches of grant money. The first grant was a payment for three months, offering 80% of your average self-employed monthly earnings, based upon your last three year’s average trading profit. The maximum payable was £7,500.
The second payment was calculated at 70% of your average self-employed monthly earnings over the same period, with a maximum payable of £6,570.
To be eligible for the second payment, you needed to demonstrate your business had been adversely affected by Covid-19 at the time of your claim. Therefore, any documentation confirming cancelled commissions, workshops, talks, book signing opportunities, etc, should be retained because these prove your eligibility for the payment. Such evidence should be kept with any other documentation you retain for this financial year’s tax return.
If you received payments through this scheme, HMRC will treat it as a grant payment for this financial year. That means you don’t have to pay it back, however, they will consider it as part of your self-employed income. Therefore, it forms part of your taxable income for this financial year, both for income tax and self-employed National Insurance contributions.
As this forms part of your 2020-2021 tax return, you should also retain any documentation relating to these grant payments, especially those detailing the amount of grant you’ve received and the grant claim reference.
At the end of July 2020, many self-employed writers would normally have made their second payment-on-account tax contribution for the previous tax year (2019-2020). However, if you were experiencing financial hardship, the Government allowed this payment to be deferred until 31st January 2021.
This was simply a postponement. Failure to pay this second payment-on-account for 2019-2020 by 31st January 2021 will incur penalties. (At the time of writing, the first payment-on-account for 2020-2021 — this financial year — will also be due on 31st January 2021.)
Contact HMRC if you’ll struggle to make this payment. They may offer an instalment plan for this and any other tax that’s due.
New Ways Of Working
Generating an income to have something to declare on this year’s tax return has been challenging. Towards the end of March, I was commissioned to produce a series of British travel pieces for a magazine, which became impossible the moment lockdown occurred. Thankfully, an understanding editor simply postponed the commissions until travel was permitted. But we also discussed ways in which I could create some travel-inspired articles using images from my own photographic library.
Even writers who are used to working from home have had to rethink the way they work. Suzie Grogan is an author, copy-editor, proofreader and researcher, based in France. She was busy completing her next book John Keats: Poetry Life and Landscapes when Covid-19 restrictions came into force.
‘Here in France,’ she explains, ‘we locked down earlier and with more draconian measures in place. We couldn’t travel further than a kilometre from the house and only then for a maximum of an hour, taking with us a piece of paper identifying one of five reasons we were outdoors. Life really was on hold. All visits to and from the UK became impossible, so research trips were cancelled straight away and arrangements for possible talks put on hold. Most importantly for me, the lockdown came just as I was completing my book and I couldn’t travel to take a number of photos to be placed in the text.’
But there are always ways and means, so Suzie began calling friends. ‘I had to ask favours of photographers and writing connections in the places I was supposed to visit to either take them for me or search their archives for images they didn’t mind me using.’
Covid-19 restrictions also affected publishing, with many publishers pushing back titles for launching later on in the year. This also affected the proofreading side of Suzie’s writing business.
‘Proofreading also seemed to dry up as publishers changed publication dates to later in the year. This “work with words,” as I call it, supports my writing work. My small advance was long spent, so things started looking pretty grim. As my husband also works in the creative industries, as a ceramicist, his work was seriously affected too.’
Luckily, for Suzie, the French Government support scheme for self-employed people was simple and straightforward to apply for.
‘The French government quickly moved to support the self-employed. It was a scheme where you simply compared monthly income in 2019 to 2020 figures. My income had dropped significantly and I worked out I was eligible for two months support. It was easy to apply, as we have to submit simple quarterly tax returns so year-on-year records are to hand.’
However, this wasn’t the only support for her writing business that Suzie tapped into. When she heard about the Author’s Contingency Fund, administered by the Society of Authors, she thought it was worth an application.
‘I was very lucky to see the post relating to the grant application process on social media,’ she says, ‘and as a member of the Society of Authors, I thought it was worth an application, as I seemed to meet the criteria. The process was straightforward and having worked as a researcher in economic and community development I was used to putting in bids for funding, understanding what information is needed and the correct terminology to use.’
Her application was successful, and it enabled her to continue with her current book project.
‘Receiving the grant quelled a rising feeling of panic. The loss of income from writing, speaking and editing meant regular bills for library and membership fees and online subscriptions were going to be hard to pay, despite the fact that they were more vital than ever during lockdown, or ‘confinement’ as it was called here. The grant meant I could relax and complete my current project, knowing these costs would be covered. It also helped with day-to-day living costs. I was so grateful to get the grant.’
Any writer who is struggling financially can apply to the Author’s Contingency Fund. It is not a requirement for applicants to be a member of the Society of Authors. The scheme is unable to offer grants for publication costs, student tuition fees, a specific writing project, or anyone who isn’t yet earning an income from their writing.
Not only has Covid-19 impacted our ability to work during the last year, but it’s also going to affect how we work in the future. Already, Suzie is changing the way she works to enable her to access her readers in different ways.
‘My book about Keats is timed to come out to mark the bicentenary of his death: February 2021,’ she explains. ‘Such things come around rarely, of course, and I was hoping for quite a splash with a launch in Hampstead and bookshop signings, alongside media coverage and a number of talks over the year. Instead, I am planning an online virtual launch, and looking into the possibility of making podcasts. I have a lot of Keatsian followers and am in touch with all the key organisations.’
‘However, I am sure it will have an impact on sales. It is the book I have always wanted to write and the one which is most personal. Keats has been through tough times with me, and the book is a little about my landscapes and love of poetry too.’
‘I am commissioned to write two further books,’ says Suzie, ‘but at present am prevented from travelling to the UK for necessary research trips by quarantine rules, so I can’t really get the enthusiasm going. I love to meet other writers face to face too. It is inspirational, and I can’t do that as yet. As a writer, I can only do what I can from online resources and wait and hope.’
There’s still a lot of uncertainty, as we navigate our way through this ever-changing situation, but there are new opportunities. Video communication services like Zoom have opened up new ways of communicating with readers. Already, my local library has hosted an author talk using Zoom.
There will also be ways in which we can monetise these new opportunities. Some writers are developing Zoom workshops, where delegates pay to attend a two-hour tutorial in small groups of ten.
And although print book sales plummeted during lockdown, they’re returning to pre-Covid levels. Meanwhile, digital sales, both in ebook format and audio, are rocketing.
For those of us trying to generate an income from our writing, it’s certainly been a challenging period. But adversity also leads to invention. We’re no different from any other business, having to adapt to survive. Just like Suzie, we’re all going to have to look for new and innovative ways to interact with our readers.
Business Directory — Useful Contacts
Gov.uk (Business Support): https://www.gov.uk/coronavirus/business-support (Select self-employed link.)
Sign up to Gov.uk Business Support emails: https://www.gov.uk/email-signup/?topic=/coronavirus-taxon/funding-and-support
HMRC’s Covid-19 Helpline: 0800 024 1222
Society of Authors’ Contingency Fund: https://www.societyofauthors.org/Grants/contingency-funds