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How to File Taxes As A Model in the UK: A Comprehensive Guide
Learn how to navigate the complicated world of filing taxes as a model in the UK, including essential tips and deadlines to keep in mind ― all backed by an expert accountant specialising in the creative industries.
Maylis Moubarak, on 19 April 2023
Content Marketing Manager at Contact
The below information has been checked by a tax specialist who regularly works with freelance creatives and models in the UK (Robert Green, Founding Director of Green & Peter Chartered Accountants, one of the top accounting firms in North London, specialising in the creative industries).
This guide gives you a general overview of how to file your taxes as a model. However, we highly recommend meeting with a tax professional, as taxes depend on your unique situation. We've included a list of services at the end.
Taxes. Just the thought of it probably makes you want to crawl back into bed and ignore it until the very last minute. Who wants to spend hours diving into old bank statements, double-checking calculations, and wondering if that number on the screen is really how much we owe? And then we're stuck trying to figure out where to find the money to pay it all.
As if taxes weren't stressful enough for regular employees, freelancers have a whole new level of confusion to deal with.
Here's the thing: employees pay their taxes through the UK's PAYE (Pay As You Earn) system, which automatically deducts tax from their income.
But freelancers must figure it out on their own. And it all starts with the HMRC ― HM Revenue and Customs. Remember it, because as soon as you start earning over £1000 per year with your modelling (or any freelancing) activity, you'll need to visit the HMRC website at least once a year.
One thing that makes filing taxes less jarring is understanding how they work, why you're paying that much, and how much you can keep for yourself ― so you can relax and look forward to filing your taxes each year (okay, we're maybe getting ahead of ourselves here).
This blog post guides you through the registration process to pay taxes as a self-employed model, and details essential deadlines and complex terms. Ready? You're about to learn a bunch.
Step 1: Registering your self-employed activity: the Self-Assessment process
As a model in the UK, whether you're with an agency or on your own, you're considered a sole trader: the sole owner of your business. Your business offers a service (modelling) to clients (agencies, other freelancers, and brands). All self-employed models need to:
- register as a sole trader with the HMRC in the UK by doing a self-assessment
- file tax returns yearly
You'll need to register as self-employed as soon as you earn over £1000 a year from your freelancing activity. You'll then need to pay taxes as soon as your total earnings surpass £12,570 (TaxScouts, 2013).
💡Trading allowance vs Tax-free allowance
You can earn up to £1,000 a year through self-employed income without having to declare it to HMRC – this is called your trading allowance. However, try registering as a sole trader and declaring your income to the HMRC as soon as you start earning money to avoid missing deadlines and further complications.
You won't pay any taxes if you've gained less than £12 570: this is your personal yearly tax-free allowance. Note that it includes income from any source of work ― whether it's via freelancing or being employed part-time or full-time by a company.
💡Sole trader vs limited company
If you're earning a lot of money while freelancing, you might consider forming a limited company instead of registering as a sole trader. You'll unlock more tax benefits and it may be worthwhile in the long term. But the process is much more complex, so we strongly recommend meeting with a tax advisor or accountant before making the choice.
What does Self Assessment mean?
Self Assessment is a system the HMRC uses to collect Income Tax in the UK for self-employed individuals.
Tax is usually deducted automatically from wages, pensions and savings through the Pay As You Earn system. But since you're self-employed, you'll need to report your income in a tax return.
Self-employed models pay tax on their income minus expenses. You'll need to list your total income, including expenses, when filing your tax return, and claim relief on your expenses in a different division of the same tax return.
If your agency pays expenses for you and doesn't deduct them from your pay, you won't be able to list these expenses in your tax return. Make sure to list expenses only if you paid for them.
When do I need to register?
The deadline for registering for Self Assessment on the HMRC is the 5th of October which follows the end of the tax year during which you started earning money as a model.
A tax (or fiscal) year runs from the 6th of April one year to the 5th of April the following year.
So let's say you began your modelling contract in June 2022; you'll need to register as self-employed by October 5th, 2023.
But as a rule of thumb, register as soon as you begin your modelling activity. Leaving it till the deadline will make it very difficult to estimate how much you'll owe by the end of the year, so the sooner your register, the better.
Book your first consultation with an accountant in March or April to better prepare and explore your available options.
How to register as a self-employed model in the UK?
The process is straightforward and relatively simple. If you need help, HMRC can assist you throughout the process. The bookkeeping platform IRIS Kash Flow (2019) has also neatly laid out the steps for you:
- Create a Government Gateway account to get your user ID, required for the next steps.
- Now head to this page and use your ID and password to sign in. That's where you'll register as self-employed for Self-Assessment tax.
- You'll be asked "what type of tax do you want to add?" Choose Self-Assessment, then choose your category – sole trader, partnership or trust. In your case, select sole trader.
- Now, add the date you started trading, which is the day you started working for yourself and getting paid.
- HMRC will now need your National Insurance number, home address, contact details and other information related to your modelling activity.
- You'll be asked what sort of self-employed work you do. Here's where you specify you're a model. Write in "model". This will help the HMRC make sure they tax you appropriately. If you're a model but also a content creator or influencer, you can type in "model and influencer."
- Double-check your information before hitting submit.
- Once your application has been received, HMRC will send you a letter with a 10-digit Unique Taxpayer Reference (UTR), which you'll use on tax payments.
- You'll also be enrolled for Self-Assessment, with which you'll officially be self-employed.
The HMRC also has a step-by-step guide to set up your freelance activity. But we recommend that you do this process with a certified accountant first to avoid making errors.
💡 What if I combine multiple freelancing activities?
If you're a model but also offer, let's say, marketing services to companies, you won't have to file separate tax returns. You'll list your total income from all of your activities in the same tax return.
Step 2: Filing tax returns
What's a tax return?
This is a form in which you declare your income for a tax year.
When should I file my tax returns?
Once you register for Self Assessment, you'll need to submit tax returns each fiscal year, even if you haven't had any income from your modelling activity.
💡Note that, as mentioned above, you won't pay any taxes if you've gained less than £12 570 in a fiscal year, which is your personal yearly tax-free allowance, but you still need to declare your income.
For the 22/23 fiscal year, which started on April 6th 2022, you'll need to:
- Register for self-assessment by October 5th, 2023 (once you do this, you don't need to do it again). As mentioned above, don't wait until October 5th to register, do it as soon as you start modelling.
- Submit your online tax return by January 31st, 2024. But try to submit it much earlier than this date ― around April each year, so you have time to save money to pay your taxes.
- Pay the taxes you owe by January 31st, 2024. It's best practice to pay your tax as soon as you receive the HMRC's tax bill.
Check the HMRC website around March each year for up-to-date deadlines for filing tax returns.
💡What if I miss a deadline?
If you've been earning income from your modelling activity since or before April 6th 2021, and haven't registered or filed a tax return yet, the registration deadline has passed. Nonetheless, you must register as soon as possible to avoid further penalties.
If you miss a deadline, you can try to refute a penalty by giving a reasonable excuse. For example, you can say that "you were unaware of or misunderstood your legal obligation" (UK Government Digital Service, 2014).
We recommend you read the documentation on the HMRC website for an in-depth overview of how tax returns work. The Taxopedia by TaxScouts can also help you familiarise yourself with essential terminology.
Step 3: Estimating how much tax you'll pay
The burning question: how much tax will you pay? Doing the math yourself can help estimate how much you'll be left with after paying your taxes, which can help you better manage your finances and build financial security.
So, let's put this into practice.
Taxscouts has an excellent calculator to estimate how much you'll be left with after paying taxes.
Let's say you earned £40K last year and spent £3K on business expenses. After paying taxes and deducting expenses, you'll be left with £29,486.
This number will change depending on the tax year you choose.
Note that you're paying taxes on your income minus deductible expenses: in this case, you're paying taxes on £37K, not £40K.
💡 How did I get to that number?
You pay no income tax on the first £12,570 that you make (this is your personal allowance).
The base income tax rate in the UK is 20%. You pay £4,886 at the base income tax rate on the next £24,430.
40,000 - 3,000 - 12,570 = 24,430
24,430 * 20% = 4,886
Then you'll need to pay national contributions. There are no contributions on the first £9,568 that you make.
You pay £3,529 in contributions (at 10.25%) on the next £27,432 that you make (this percentage can change each year).
40,000 - 3,000 - 9,568 = 27,432
27,432 * 10,25% = 3,529
You pay £164 in NI Class 2 contributions (£3.15/week, 52 weeks in a year).
After subtracting expenses, income tax and national contributions, you'll get your expected income (£29,486).
Do I need to pay national insurance tax?
You usually pay two types of National Insurance if you're self-employed (TaxScouts, 2022):
- Class 2 if your profits are £6,725 or more a year
- Class 4 if your profits are £11,909 or more a year
💡 Profits = income - deductible expenses
What if I also have a part-time job where I'm employed?
When you're employed, taxes are automatically deducted from your pay through the PAYE (Pay As You Earn) system. But you'll need to declare both your freelancing income and your PAYE earnings. HMRC will then work out your total taxes to pay by deducting the tax paid through your part-time income.
You'll find different divisions on your tax return, with one part reserved for PAYE earnings, another one for claiming expenses, and another part for your freelancing activities.
It'll be similar for National Contributions, but we won't go into calculations as the HMRC will do all of this for you.
Step 4: Claiming tax relief on business expenses
How can I claim tax relief on my business expenses?
You can get tax relief based on your business expenses and the rate at which you pay tax.
Example: If you spent £3000 in expenses and pay tax at a rate of 20% in that year, the tax relief you can claim is £600.
You can only claim these expenses if you paid tax in each tax year you're claiming for (GOV.UK, 2014). You'll list your income and expenses on the same tax return.
What business expenses can I claim tax relief on as a model?
Here's a non-exhaustive list of expenses you can claim relief on as a model (Keepertax, n.d.):
- Clothing – but make sure you don't over-claim, you'll need specific proof that any clothing item you had to buy was for a job you got booked for and completed.
- Subscriptions to model associations, such as union fees to Equity or The Model Alliance.
- Agency fees - Deduct any commission that the agency hiring you takes from every shoot or show.
- Marketing/portfolio building – costs you induced to promote yourself and build your portfolio. Write off anything you paid to promote your modelling activity, such as test shoots and portfolio printing costs. You can ask your agency to send you the receipts for these expenses if they deducted them from your pay.
- Travel and related expenses. Here again, if you're signed to an agency, ask your agency's accountant to send you all receipts.
- Beauty supplies – makeup, hair, or beauty supplies for jobs are partially deductible. Like clothing, you'll need to prove these expenses were related to a specific job you've completed.
- Health and gym membership – if you have a personal coach or trainer, you can write off your expenses, although it can be hard to get these approved.
- Video and photography equipment and creative software – anything you use to create content and that you need for your work is tax deductible.
- Home office expenses - you can claim tax relief on your home office furniture, wi-fi, phone and electricity bill, and even part of your rent.
Gym memberships, clothing, makeup and grooming are often grey areas regarding modelling expenses. So we recommend filing your tax return with a tax specialist to ensure you file the form correctly and can claim as much as possible.
Tracking your expenses when modelling is essential to claim tax relief. You'll need to keep a record of all of your business expenses for six years. This is if the HMRC asks you to prove your claimed expenses.
Tips for recording your expenses
- Use a separate debit card for your expenses
- Take a picture of all of your receipts as soon as you get them
- Print or save emails of clients requesting you to purchase items for a shoot (in case the HMRC ever asks you for proof)
- Ask your agency to give you receipts for any money they pay on your behalf and then deduct from your pay, or ask you to spend for a shoot or show
- Create an online drive with your receipts, and separate them into folders categorised by month and type of expense. For example: 2022 > Receipts > October > Travel / Clothing / Test Shoot / Treatment etc. You can keep one folder for recurring expenses such as subscriptions and memberships.
- Create an online drive with your invoices, and categorise folders by month and by client/job. This will help you keep track of all of your payments to write down your total income later.
- Block time in your calendar each month to write down your expenses and pay in your income and expense tracker. Doing it monthly will be much easier than recording months of expenses in one setting.
- Use software if you combine multiple freelancing activities or have a big modelling income.
Insights from Robert Green, a tax specialist working with freelance creatives in Fashion
What are the pros and cons of going freelance in terms of taxes? Are there any notable benefits? Or is it always better on the PAYE system?
As a freelancer, you'll be able to claim more expenses. You may end up paying less tax in the end than on the PAYE system. The main con is that you need to do it all yourself or with an adviser.
What is your top tip for models filing their taxes for the first time?
File your tax return as soon as possible. The sooner, the better, as it'll give you peace of mind and will allow you to save enough money each month before January, when it's time to pay your taxes.
Do you have any advice for freelancers combining multiple freelance activities when filing their taxes?
You have to put everything on one tax return instead of filing separate ones.
Any tips for freelancers wanting to get a loan? How can they put all the chances on their side to secure a loan?
You need strong proof of income, showing that you've been earning a stable salary for over a year or more. Your proof of income comes from your tax returns, so as soon as you have a record of a 2-year tax return showing stable income, you'll get a higher chance of getting a loan.
What if I earn income in multiple countries/currencies?
It gets more complex if you're not a UK resident and get your income from multiple countries. To avoid double taxation, you should meet with an accountant. If you're a UK resident earning income from France, for example, you'll pay tax only in the UK but will need to declare it in the UK.
About Robert Green
This guide has been reviewed by Robert Green, Founding Director of Green & Peter Chartered Accountants, one of the top firms in North London, specialising in the creative industries. He's worked with many models and creative freelancers and offers a range of services for people working in the Fashion industry. His team can help you decide whether you should set up as a sole trader or a limited company, manage your finances to grow your business and save money when it comes to paying your annual tax bill.
The first consultation is free. Book a consultation to meet their lovely team!
Green & Peter Accountants
1339 High Rd, London N20 9HR
020 8446 8100
List of useful sources for filing taxes
Recommended tax specialist in London: Green & Peter Accountants
Online tools & services:
TAX SCOUTS: Tax Scouts offer one-off tax advice from an accredited accountant. Totally remote, no strings attached.
Book a tax advice consultation for 1-1 professional support by phone or video call. £119, all in. Learn more.
They can also do the entire self-assessment process for you for £149.
COCONUT: The accounting & tax app for self-employed people. Coconut’s simple tax app helps self-employed people track income, send invoices, categorise expenses, and work out how much tax you owe in real-time.
CRUNCH: Crunch has a free online accounting software that makes it easy for you to organise every bit of administrative, accounting, and taxing-related information in one place.
You can also ask an accountant from the Crunch team if you need further assistance: it’s only a one-off fee of £39.50+VAT and you’ll get this refunded in 30 days if you upgrade to Pro, Premium or Small Business plans.
EQUITY: Equity is the UK trade union for fashion models.
They fight for their members’ rights at work and offers tax advice and legal support.
The HMRC website: Dig deep into their guides to get:
- a complete overview of taxes
- the different freelance statuses you might be eligible for
- up-to-date deadlines
- procedures to file your tax claims
- and more.
Stay tuned: we have an ebook coming up soon explaining the whole business side of being a model, from taxes to finances and contracts. Sign up to the newsletter to know when it's out.
Maylis Moubarak, on 19 April 2023
Content Marketing Manager at Contact
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