Providing Tax Refund Services to the Arts and Academia
Dr Trevor Thomas is a tax consultant, lawyer, academic and author. A former chartered accountant, he now exclusively provides tax services to writers — both fiction and non-fiction, popular and academic — and others in the arts and academia.
How Can I Help?
Tax Refunds Ficton Writers
Tax Refunds Academic Writers
Tax Refunds Performers
Tax Compliance
Accountancy
Tax Negotiations & Representation
How Can I Help?
Need Advice, email me now at trevor@drtrevorthomas.com
Case Studies
Agatha: Professor & Consultant
Agatha, a university professor of business administration, was also registered as a self-employed provider of management consultancy services. For five consecutive years she enjoyed no consultancy income. However the expenditure she incurred relating to the business was successfully set off against her employment income generating a repayment of tax for each of those five years. In the sixth year I discussed with Agatha whether it was time to close the business because HMRC may conclude, in the absence of any trading income over such a period of time, that she was not trading with a view to profit. We decided to submit for a sixth year with tax losses but informing HMRC, on the face of the Return, that the consultancy had ceased to trade. Note that Agatha received loss relief for six consecutive years in respect of a trade that enjoyed no taxable income whatsoever. I must emphasise that she fulfilled the conditions of trading: actively seeking clients, maintaining a live (if elementary) website, and regularly notifying prospective clients of her area of expertise, specialisation and experience. The fact that clients chose not to pay her high chargeable rates (which were wholly commensurate with her professional and academic education) in no way negated the fact that she was trading with a view to profit.
Hubert: Sales Manager & Comedy Writer
Hubert, a high earning salaried sales manager in the car industry, had spent many years creating some memorable advertising campaigns. He told me he’d always wanted to write a popular book on his many funny adventures. He’d already made many jottings and we agreed that he start taking the project seriously. I registered him as self-employed and he started the first of a series of drafts. He decided to call the memoir — and I thought this rather clever — “An Auto-Biography”. The expenses he inevitably incurred resulted in a trading loss, which I offset against his earned income, resulting in a repayment of tax. As often happens, life intervened and his work was never completed (though it may be yet). The loss relief he enjoyed has never been questioned (nor should it) by HMRC.
Frank: Teacher & Impresario
A teacher, Frank, financed his wife’s production of a play she had written. The play was performed and enjoyed a brief tour of community theatres. The play was a critical success but not a commercial one. Frank lost his investment. Prior to the tour, on my advice, Frank registered with HMRC as a theatre impresario in partnership with his wife. The profit share (and, consequently, the loss share) was 90%:10%, respectively, reflecting the ratio of their financial risk. Thankfully, Frank was able to offset (through a carryback relief provision) 90% of the theatre's trading losses against his income as a teacher. The resulting tax repayment eased some of his financial burden. The partnership dissolved when the tour concluded.
Keith: Teacher (retired) & Journalist
Keith was a retired teacher and youth worker. He had three sources of income: the state UK pension, a US private pension and a UK annuity purchased some years ago. In addition, Keith worked as a freelance journalist for the local free newspaper, covering all the games — home and away, league and cup — of his beloved hometown football team. Although on one level, his writing was a labour of love, he was also without doubt a self-employed professional journalist and registered as such with HMRC. The resources of the newspaper he worked for were limited, but Keith actively sought, and often obtained, sponsorship for his weekly column from local businesses. Keith was clearly trading with a view to profit and his earnings from the newspaper (and sponsorships) would’ve increased dramatically had the club, presently languishing in the third tier of English football, regained its status in the Premier League. HMRC accepted Keith‘s accounts annually and the offset of his losses against his other income. This offset did not create a tax repayment because you can only get a repayment from tax you have first paid, and all of Keith‘s income was paid gross (i.e without deduction of tax at source). However the losses did significantly reduce, almost eliminate, his annual UK tax liabilities.
Duncan: Scaffolder & Sportsman
Duncan, an employed scaffolder, commenced writing his memoirs, provisionally titled “Lion Cub: A Dream Deferred'', in April 2021 following the planning and research he had undertaken during the coronavirus pandemic (he was on furlough for seven months). The book chronicles his life, leading up to his promising career as a gifted young footballer playing for England Schoolboys against or alongside the likes of future England internationals Harry Kane and Alex Oxlade-Chamberlain and the Jamaican international Michael Hector. It details the cruel and abusive forces — mental and physical — that led him to settle, because of the love of football alone, for a semi-pro career with Westside FC. Duncan intends to upload the reminiscences as an Amazon ebook on their Kindle Direct Publishing platform in 2022/23. The book is particularly apposite to the current political and social climate, and is being written with a view to profit. All losses for the fiscal years 2020/21 and 2021/22 (all expenses remember, no income) were offset against his salaried income generating a repayment of tax for those years.
Makena: Assistant Head Teacher and Social Entrepreneur
Makena, an Assistant Head Teacher at a London Secondary school, took a sabbatical to create and deliver a series of literacy based singing and songwriting workshops for after-school drama clubs. Though she sought grant-based public funding, Makena ended up financing much of the project herself. Her plan was that her work would make a lasting contribution to addressing the needs of SEN pupils, particularly those in the black and ethnic minority communities. However, the project needed to be financially successful in order to provide the resources for ongoing reinvestment, expansion and up-scaling. This served as a sufficient basis for HMRC to accept that she was trading with a view to profit, and her substantial first year losses were successfully carried back and offset against her PAYE salaried income as a teacher for the earlier years, thereby generating a refund of tax, which she chose (though she was in no way obligated) to reinvest in her literacy based singing workshops.
Saul: Doctor and Textbook Writer
Saul, a doctor employed by the NHS, asked me why HMRC would not allow as a deduction against his employment income all the subscription costs he paid during the year. I explained that HMRC work to an “Approved List“ and clearly some of the organisations of which he was a member didn’t make the cut. I explained, however, that all of his subscriptions would be deductible if he was a self-employed writer alongside his NHS employment (because the legislative test for such deductions were more generous for the self-employed). I knew Saul was co-authoring a book, together with a colleague, on the immediate psychological and physiological responses to severe physical injury (medical trauma). I registered him as a self-employed writer and claimed, as allowable deductions, all related expenses, generating a loss and leading to a tax repayment. Interestingly, Saul’s book became a leading medical textbook and required reading for medical students throughout the English-speaking world, so HMRC enjoyed its bounty in the end. But still, Saul received his tax repayment when he needed it most.
Agatha: Professor & Consultant
Agatha, a university professor of business administration, was also registered as a self-employed provider of management consultancy services. For five consecutive years she enjoyed no consultancy income. However the expenditure she incurred relating to the business was successfully set off against her employment income generating a repayment of tax for each of those five years. In the sixth year I discussed with Agatha whether it was time to close the business because HMRC may conclude, in the absence of any trading income over such a period of time, that she was not trading with a view to profit. We decided to submit for a sixth year with tax losses but informing HMRC, on the face of the Return, that the consultancy had ceased to trade. Note that Agatha received loss relief for six consecutive years in respect of a trade that enjoyed no taxable income whatsoever. I must emphasise that she fulfilled the conditions of trading: actively seeking clients, maintaining a live (if elementary) website, and regularly notifying prospective clients of her area of expertise, specialisation and experience. The fact that clients chose not to pay her high chargeable rates (which were wholly commensurate with her professional and academic education) in no way negated the fact that she was trading with a view to profit.
Hubert: Sales Manager & Comedy Writer
Hubert, a high earning salaried sales manager in the car industry, had spent many years creating some memorable advertising campaigns. He told me he’d always wanted to write a popular book on his many funny adventures. He’d already made many jottings and we agreed that he start taking the project seriously. I registered him as self-employed and he started the first of a series of drafts. He decided to call the memoir — and I thought this rather clever — “An Auto-Biography”. The expenses he inevitably incurred resulted in a trading loss, which I offset against his earned income, resulting in a repayment of tax. As often happens, life intervened and his work was never completed (though it may be yet). The loss relief he enjoyed has never been questioned (nor should it) by HMRC.
Frank: Teacher & Impresario
A teacher, Frank, financed his wife’s production of a play she had written. The play was performed and enjoyed a brief tour of community theatres. The play was a critical success but not a commercial one. Frank lost his investment. Prior to the tour, on my advice, Frank registered with HMRC as a theatre impresario in partnership with his wife. The profit share (and, consequently, the loss share) was 90%:10%, respectively, reflecting the ratio of their financial risk. Thankfully, Frank was able to offset (through a carryback relief provision) 90% of the theatre's trading losses against his income as a teacher. The resulting tax repayment eased some of his financial burden. The partnership dissolved when the tour concluded.
Keith: Teacher (retired) & Journalist
Keith was a retired teacher and youth worker. He had three sources of income: the state UK pension, a US private pension and a UK annuity purchased some years ago. In addition, Keith worked as a freelance journalist for the local free newspaper, covering all the games — home and away, league and cup — of his beloved hometown football team. Although on one level, his writing was a labour of love, he was also without doubt a self-employed professional journalist and registered as such with HMRC. The resources of the newspaper he worked for were limited, but Keith actively sought, and often obtained, sponsorship for his weekly column from local businesses. Keith was clearly trading with a view to profit and his earnings from the newspaper (and sponsorships) would’ve increased dramatically had the club, presently languishing in the third tier of English football, regained its status in the Premier League. HMRC accepted Keith‘s accounts annually and the offset of his losses against his other income. This offset did not create a tax repayment because you can only get a repayment from tax you have first paid, and all of Keith‘s income was paid gross (i.e without deduction of tax at source). However the losses did significantly reduce, almost eliminate, his annual UK tax liabilities.
Duncan: Scaffolder & Sportsman
Duncan, an employed scaffolder, commenced writing his memoirs, provisionally titled “Lion Cub: A Dream Deferred'', in April 2021 following the planning and research he had undertaken during the coronavirus pandemic (he was on furlough for seven months). The book chronicles his life, leading up to his promising career as a gifted young footballer playing for England Schoolboys against or alongside the likes of future England internationals Harry Kane and Alex Oxlade-Chamberlain and the Jamaican international Michael Hector. It details the cruel and abusive forces — mental and physical — that led him to settle, because of the love of football alone, for a semi-pro career with Westside FC. Duncan intends to upload the reminiscences as an Amazon ebook on their Kindle Direct Publishing platform in 2022/23. The book is particularly apposite to the current political and social climate, and is being written with a view to profit. All losses for the fiscal years 2020/21 and 2021/22 (all expenses remember, no income) were offset against his salaried income generating a repayment of tax for those years.
Makena: Assistant Head Teacher and Social Entrepreneur
Makena, an Assistant Head Teacher at a London Secondary school, took a sabbatical to create and deliver a series of literacy based singing and songwriting workshops for after-school drama clubs. Though she sought grant-based public funding, Makena ended up financing much of the project herself. Her plan was that her work would make a lasting contribution to addressing the needs of SEN pupils, particularly those in the black and ethnic minority communities. However, the project needed to be financially successful in order to provide the resources for ongoing reinvestment, expansion and up-scaling. This served as a sufficient basis for HMRC to accept that she was trading with a view to profit, and her substantial first year losses were successfully carried back and offset against her PAYE salaried income as a teacher for the earlier years, thereby generating a refund of tax, which she chose (though she was in no way obligated) to reinvest in her literacy based singing workshops.
Saul: Doctor and Textbook Writer
Saul, a doctor employed by the NHS, asked me why HMRC would not allow as a deduction against his employment income all the subscription costs he paid during the year. I explained that HMRC work to an “Approved List“ and clearly some of the organisations of which he was a member didn’t make the cut. I explained, however, that all of his subscriptions would be deductible if he was a self-employed writer alongside his NHS employment (because the legislative test for such deductions were more generous for the self-employed). I knew Saul was co-authoring a book, together with a colleague, on the immediate psychological and physiological responses to severe physical injury (medical trauma). I registered him as a self-employed writer and claimed, as allowable deductions, all related expenses, generating a loss and leading to a tax repayment. Interestingly, Saul’s book became a leading medical textbook and required reading for medical students throughout the English-speaking world, so HMRC enjoyed its bounty in the end. But still, Saul received his tax repayment when he needed it most.
Agatha: Professor & Consultant
Agatha, a university professor of business administration, was also registered as a self-employed provider of management consultancy services. For five consecutive years she enjoyed no consultancy income. However the expenditure she incurred relating to the business was successfully set off against her employment income generating a repayment of tax for each of those five years. In the sixth year I discussed with Agatha whether it was time to close the business because HMRC may conclude, in the absence of any trading income over such a period of time, that she was not trading with a view to profit. We decided to submit for a sixth year with tax losses but informing HMRC, on the face of the Return, that the consultancy had ceased to trade. Note that Agatha received loss relief for six consecutive years in respect of a trade that enjoyed no taxable income whatsoever. I must emphasise that she fulfilled the conditions of trading: actively seeking clients, maintaining a live (if elementary) website, and regularly notifying prospective clients of her area of expertise, specialisation and experience. The fact that clients chose not to pay her high chargeable rates (which were wholly commensurate with her professional and academic education) in no way negated the fact that she was trading with a view to profit.
Hubert: Sales Manager & Comedy Writer
Hubert, a high earning salaried sales manager in the car industry, had spent many years creating some memorable advertising campaigns. He told me he’d always wanted to write a popular book on his many funny adventures. He’d already made many jottings and we agreed that he start taking the project seriously. I registered him as self-employed and he started the first of a series of drafts. He decided to call the memoir — and I thought this rather clever — “An Auto-Biography”. The expenses he inevitably incurred resulted in a trading loss, which I offset against his earned income, resulting in a repayment of tax. As often happens, life intervened and his work was never completed (though it may be yet). The loss relief he enjoyed has never been questioned (nor should it) by HMRC.
Frank: Teacher & Impresario
A teacher, Frank, financed his wife’s production of a play she had written. The play was performed and enjoyed a brief tour of community theatres. The play was a critical success but not a commercial one. Frank lost his investment. Prior to the tour, on my advice, Frank registered with HMRC as a theatre impresario in partnership with his wife. The profit share (and, consequently, the loss share) was 90%:10%, respectively, reflecting the ratio of their financial risk. Thankfully, Frank was able to offset (through a carryback relief provision) 90% of the theatre's trading losses against his income as a teacher. The resulting tax repayment eased some of his financial burden. The partnership dissolved when the tour concluded.
Keith: Teacher (retired) & Journalist
Keith was a retired teacher and youth worker. He had three sources of income: the state UK pension, a US private pension and a UK annuity purchased some years ago. In addition, Keith worked as a freelance journalist for the local free newspaper, covering all the games — home and away, league and cup — of his beloved hometown football team. Although on one level, his writing was a labour of love, he was also without doubt a self-employed professional journalist and registered as such with HMRC. The resources of the newspaper he worked for were limited, but Keith actively sought, and often obtained, sponsorship for his weekly column from local businesses. Keith was clearly trading with a view to profit and his earnings from the newspaper (and sponsorships) would’ve increased dramatically had the club, presently languishing in the third tier of English football, regained its status in the Premier League. HMRC accepted Keith‘s accounts annually and the offset of his losses against his other income. This offset did not create a tax repayment because you can only get a repayment from tax you have first paid, and all of Keith‘s income was paid gross (i.e without deduction of tax at source). However the losses did significantly reduce, almost eliminate, his annual UK tax liabilities.
Duncan: Scaffolder & Sportsman
Duncan, an employed scaffolder, commenced writing his memoirs, provisionally titled “Lion Cub: A Dream Deferred'', in April 2021 following the planning and research he had undertaken during the coronavirus pandemic (he was on furlough for seven months). The book chronicles his life, leading up to his promising career as a gifted young footballer playing for England Schoolboys against or alongside the likes of future England internationals Harry Kane and Alex Oxlade-Chamberlain and the Jamaican international Michael Hector. It details the cruel and abusive forces — mental and physical — that led him to settle, because of the love of football alone, for a semi-pro career with Westside FC. Duncan intends to upload the reminiscences as an Amazon ebook on their Kindle Direct Publishing platform in 2022/23. The book is particularly apposite to the current political and social climate, and is being written with a view to profit. All losses for the fiscal years 2020/21 and 2021/22 (all expenses remember, no income) were offset against his salaried income generating a repayment of tax for those years.
Makena: Assistant Head Teacher and Social Entrepreneur
Makena, an Assistant Head Teacher at a London Secondary school, took a sabbatical to create and deliver a series of literacy based singing and songwriting workshops for after-school drama clubs. Though she sought grant-based public funding, Makena ended up financing much of the project herself. Her plan was that her work would make a lasting contribution to addressing the needs of SEN pupils, particularly those in the black and ethnic minority communities. However, the project needed to be financially successful in order to provide the resources for ongoing reinvestment, expansion and up-scaling. This served as a sufficient basis for HMRC to accept that she was trading with a view to profit, and her substantial first year losses were successfully carried back and offset against her PAYE salaried income as a teacher for the earlier years, thereby generating a refund of tax, which she chose (though she was in no way obligated) to reinvest in her literacy based singing workshops.
Saul: Doctor and Textbook Writer
Saul, a doctor employed by the NHS, asked me why HMRC would not allow as a deduction against his employment income all the subscription costs he paid during the year. I explained that HMRC work to an “Approved List“ and clearly some of the organisations of which he was a member didn’t make the cut. I explained, however, that all of his subscriptions would be deductible if he was a self-employed writer alongside his NHS employment (because the legislative test for such deductions were more generous for the self-employed). I knew Saul was co-authoring a book, together with a colleague, on the immediate psychological and physiological responses to severe physical injury (medical trauma). I registered him as a self-employed writer and claimed, as allowable deductions, all related expenses, generating a loss and leading to a tax repayment. Interestingly, Saul’s book became a leading medical textbook and required reading for medical students throughout the English-speaking world, so HMRC enjoyed its bounty in the end. But still, Saul received his tax repayment when he needed it most.