I need financial advice! Who wants to help?

[TR888]

Hi,

I am in full-time employment and am a high tax payer (just). I also get a small income from book royalties and I expect it will increase in the future. It is currently perhaps around £4,500/year and I assume I will need to pay 40% tax on that. Does it make sense to set up as sole trader for the book royalties or realistically it is too much faff for the small income? I detest admin so if it's not going to save me a lot in tax, maybe it's not worth it.

My husband has recently become self-employed. We own a small flat which is in my name for tax purposes and obviously the tiny profit we make goes in tax. It would make sense to somehow put it in my husband's name but I've no idea how to do that.

Do I need a financial advisor/accountant? I have the feeling we don't earn enough to justify it but perhaps that's a misconception. What do you think?

It sounds like you are already getting the book income as sole trader??? That basically just means being self employed in your own name - and you need to register with hmrc as that for self assessment

Wrt royalties from the book, why do you think this will increase? Most book sales tend to decrease year on year unless you have a big bestseller or an in-demand textbook or non-fiction in niche area. £4,500 pa is actually a lot of book sales if it’s a traditional royalties deal through a publisher - I assume you’d have said if self-published.

You would be worth getting an accountant or advisor, yes, if you intend to keep going with book stuff.

Thanks!

I have a traditional publisher but my new books are self-published - those are the ones doing well. My niche is in education. I am about to release another book (with more in the pipeline) and as I am gaining a reasonably strong social media following, it's not unreasonably to expect my royalties to increase in the future.

Regarding registering as a sole trader, I have a unique reference number, is that all I need to do? I thought the process would be a bit more complex?

I’ve heard it said that a good accountant will save you more than they cost. I would make an appointment for an overview with an accountant. You could pay their fee from the initial savings they make or if they confirm that it is as straightforward as you think then it’s a small price to pay for peace of mind.

Yes, I think you are right, thanks.

You can have the trading £1k allowance against your royalties and £1k property allowance against any rental income if you complete a tax return

I’m in a similar position (although second income from consulting rather than publishing.
Accountant advised me to register as employed / self employed and I just complete a tax return each year.
It’s straightforward- your P60 autopopulates your ‘employed’ earnings and then you just fill in your ‘self-employed’ earnings.
You can offset expenses such as £10 a month for use of home office, travelling expenses and fees for any professional bodies.