Starting a new photography business

[MikeManalac]

Hi all -

I apologize that this is in English - my Swedish is terrible!

I've tried a few websites now to try and understand how to setup a new photography business here in Sweden. Im from Australia and I'm finding the process quite confusing - I just want to make sure I'm doing the right thing, putting away the right amount of money, being taxed correctly etc.

These questions may be incredibly basic, but I am more than happy to receive very long, descriptive answers, to make sure I'm not missing anything. The more help, the better, basically! I have searched the forums here and I have tried simply using google translate to get my answers, but a lot of it still doesn't make complete sense, so this is why I'm here.

I have also tried multiple times to get information or to speak to someone or to organize a meeting at the Skatteverket, but I have the feeling I'm better off speaking to a brick wall! I have received no answers and no-one ever gets back to you there.

To be clear: I work full time in a different industry, and I would like to start a business on the side in photography. I would really really appreciate any help you guys could give in English, because I am clueless right now!

So my questions are:

- What is the best way to start a business? From what I've gathered there seem to be 2 main options - FA Tax, and Frilans Finans - is this correct?

- Are both FA Tax and Frilans Finans good for sole-traders, like me (1-person business?)

- Is applying for FA Tax as easy as they say? Fill out the form > send to Skatteverket > thats it? Do I need to fill out any other forms whatsoever besides the FA Tax form?

- Is applying for Frilans Finans much more difficult?

- Is it possible to do a once-yearly tax declaration instead of a monthly one? I've heard monthly ones are much more common in Sweden. I'm asking because I really don't expect to be making much (or any!) money in the first year or two of business, and having a regular monthly tax taken from my bank account would hurt a lot!

- How does MOMS and VAT work? I've read that this is an amount you should move straight from any invoices to an account for tax, PLUS an extra amount of tax. How much extra tax on top of MOMS and VAT would I pay - especially knowing that I'm also working full time?

- What is the normal MOMS and VAT amount? Is it normal to have my charges inclusive of this when I bill someone?

- What is a recommended book-keeping software for my taxes? Is Excel ok? And what exactly do I need to record? My guess is money charged from a job > costs of that particular job > costs of equipment purchases/hire > costs of web services, internet bills etc.. is that all?

- Can you claim website server bills, internet bills, electricity, phone or anything like that?

- Can I claim for equipment I bought last year or the year before?

- Can anyone recommend a good place to go for insurance as a sole trader? I would like insurance for my equipment (damage, theft, etc), myself (injury I cause to myself - which covers loss of income). Can you get insurance covering you for other things? (If someone tries to sue you, if you accidentally cause damage to them or their assets, etc).

Honestly any information would be wonderful - any tips, tricks, advice, send it all my way! I really just want to make sure I'm doing this all properly and that I don't get in trouble because I forgot something down the track.

Thank you so much in advance!

cheers
- Mike

 

[Pirog]

Hey!

Sorry that you've had no replies at all here yet. I am by no means an expert and I don't even have answers for all your questions. However, as no one replied yet I feel that I can at least contribute with what I do in fact know.

1. Frilans Finans works perfect. I guess most people would maybe recommend going the whole way with an "Enskild Firma" or "Företag". I however, have not come to that yet and for my hobby, side-project invoices to clients, I go Frilans Finans. I'm doing some DJ:ing and very (VERY) simple photo, design and text jobs a little now and then and I'm using Frilans Finans for that. Of course they take a small amount of what you get out of it in their own pocket but as my side-projects are so irregular and it can sometimes just pass a day or two between them but more often a couple of months I feel that Frilans Finans is a good way to go. Less work for me with the boring stuff.
If I make this more into a career of sorts I will do the boring stuff and read about the other ways to go. But for now I'm satisfied. So maybe that's a way for you to try, until you get the projects going?

Frilans Finans's always been quick with handling for me. Once I had to wait almost four weeks on the payment and that was because of the client, a big company, apparently had payment complaints. So be sure to look up your client closely if you do not want to wait a little longer for your payment.

2. The friends I have that having their own businesses usually started out with an "Enskild Firma". Cheaper and works well apparently. I think the biggest difference is that you are still responsible for debts and the economy, as a person. Which can get ugly if you can't handle the bills.
Starting a company will cost you 50.000SEK however if I'm not mistaken. And you can still have the FA Tax with an "Enskild Firma". What I've heard from friends and the short amount of time I've spent looking into it myself, if I was to go that way, starting an "Enskild Firma" is almost as easy as you described it.
I have however an association (Förening) under my name and that's almost as easy. Fill in some papers of the name and who's behind it all, the board etc. Get your organisation number in return, go to the bank and open an account in the associations name. It should be as easy with an "Enskild Firma" too.


3. Regarding the insurances I work at one of the bigger insurance companies here in Sweden.
However only at the private part of the market, not with insuring businesses and companies.
If you need any questions regarding your personal insurances, including your cameras and what not, as long as they are owned by you and not your company feel free to send me a message here and I'll tell you more.

So, without knowing how far into photography as a business you are or were back in Australia and what your exact goal is here I would recommend working just under your own name through Frilans Finans or maybe going with an "Enskild Firma" as a start.
Easy to get in, easy to get out in case papers and digits take away all the fun from you.

Good luck!

 

[Boukreev]

Hej, Mike

Personally I wouldn't want to enter the world of pain you seem to be describing (admission: I skimmed through your original post very quickly). My recommendation to you is to find a suitable 'ekonomisk förening' [often shortened to ek. för. = incorporated association (society), economic (cooperative) association (union)] that is willing to offer you membership. This form of business enterprise includes some very large organisations such as Konsum and OKQ8, but it's also used by much smaller entities such as sports clubs and people working in the cultural sector (see section Economic association, page 8 of <http://www.skatteverket.se/download/18.77dbcb041438070e0399226/1390219126006/462b11.pdf>).

I suggest you ask your trade union representative for advice on finding a suitable coop. Some unions also have service companies that can handle all the paperwork and interaction with tax authorities for you; my union charges a 10% fee for this – a snip, believe me!

Med vänlig hälsning, David

 

[J Tjerneng]

Hi all -

So my questions are:

- What is the best way to start a business? From what I've gathered there seem to be 2 main options - FA Tax, and Frilans Finans - is this correct?

- Are both FA Tax and Frilans Finans good for sole-traders, like me (1-person business?)

- Is applying for FA Tax as easy as they say? Fill out the form > send to Skatteverket > thats it? Do I need to fill out any other forms whatsoever besides the FA Tax form?

- Is applying for Frilans Finans much more difficult?

- How does MOMS and VAT work? I've read that this is an amount you should move straight from any invoices to an account for tax, PLUS an extra amount of tax. How much extra tax on top of MOMS and VAT would I pay - especially knowing that I'm also working full time?

- What is the normal MOMS and VAT amount? Is it normal to have my charges inclusive of this when I bill someone?

Hi Mike,

I can't say that I'm able to answer everything but I could maybe offer some opinion on the matter.

First: You say you work full time with something else so I suppose that your business would be quite limited. Now, maybe the advice would be diferent if your goal is to change this and move towards having a full time business to be able to quit your job. But let's say that for now, that's not the case.

I would recommend to start with Frilans Finans if you have one-two smaller jobs per month. It basically means that you skip all the hassle of actually having a business as you work independetly but formally being employed by Frilans Finans for the specific hours that you write on your invoice. They handle everything that has to do with taxes and you recive salary with the same conditions as your other employer. Of course, this is very practical and you avoid the brick wall known as Skatteverket.

Obviously, Frilans Finans do take a precentage of your earnings to preform this service, so when you are about to expand and become a more steady business, you might want to start your own company to keep that money for yourself.

MOMS and VAT: Correct me if I'm wrong, but isn't VAT just a translation of MOMS (Value Added Tax = > Mervärdesskatt = Moms)? So I think it's the same thing. And for photography the VAT is 25 % that you add on top of the price of your service. The basic principle (if you have your own company) is that you add the VAT on your invoice, recive that money to your account. On everything you buy (equipment or services) you also pay VAT to that provider. The difference in the VAT that you recive and the VAT that you pay, is what you then in the end pay to Skatteverket.

Let's say you only have one invoice this year, and your price is 10 000 SEK. Then your customer pay you 12 500 SEK, and 2 500 of those is "reserved" for Skatteverket (utgående moms). But you also buy equipment worth 5 000 SEK, which means that you would pay 6 250 SEK to the store, 1 250 being the VAT (ingående moms).
So, then the diference - 2 500-1250 = 1250 SEK - would be the amount that you need to pay to Skatteverket. Skatteverket recives the whole amount - 2 500 SEK, as the store you bought the equipment have to pay their 1 250 as well. But your balance in this transaction would be 12 500 - (5000 + 1250) = 6 250 SEK.

In Sweden the VAT is diferent for diferent services or products. It's 6 %, 12 % or 25 %. Books for instances has a lower VAT, while camera equipment has the "normal" 25 %. Also it differs on the services you might sell. If you sell an article with photos, you would charge 6 % for the text and 25 % for the photos. Just to make this more complicated in your book keeping.

I'm not sure how this works if you use Frilans Finans. I suppose that you can make some deductions for exemple by adding costs to your invoice instead of just writing a fixed price and thus deducting VAT for costs connected to a specific project. But it would be more difficult adding "costs" for equipment bought for a general use (as your camera) and even more so if you bought it last year etc. If you start your own company, the company could theoretically buy your personal camera so that it becomes company property instead of personal. But this transaction does NOT enable you to deduct moms/VAT. You can only deduct VAT on purchases made directly from another company, never from a private person even if that person is yourself.
However, if you go to a store and buy a camera, memory card or whatever, you can buy it as a private person and then "reinburse" yourself from your company, thus getting the VAT-deduction. It has to be done in a short limited time frame though, it cannot be done with used equipment. Not sure if there is a fixed limit of time or if it's more a question of interpreting when a piece of equipment goes from being "new" to being "second hand"... Maybe someone could elaborate on that better than me.

 

[Matts Olof]

Hi Mike!

Frilans Finans might be a good alternative. Though I've never used them myself. I registered my "enskild firma" a few years ago, hoping to get my company going. I choosed FA-skatt. I think that eases up the administration of my taxes and VAT. I work full time and tries to sell a foto once in a while. Anyhow contact "skatteverket" (they helped my a lot and had exellent service) and they'll give you good advice in english about what best to do.

I don't know if frilans finans gives you the oportunity to discount the VAT on your equipment and other expences, while "enskild firma" and "FA-skatt" surely does. I do my taxes and "income declaration" once a year. No big hussle. You can't use exel for book keeping, all changes made in your book keeping must be traceble. Free software avalible.

Still my only real advise is to contact skatteverket, they'll guide you through almost everything.

Best whishes!
Ps. sorry about my crappy english.

 

[Christer2]

Mike

You might be able to find some info here

http://www.skatteverket.se/servicel...porations.4.70ac421612e2a997f85800095906.html

Concerning tax for companies, it may be useful to be registered as a Company (even if it is small).
http://www.skatteverket.se/download/18.15532c7b1442f256baead0b/1395152027225/432B12.pdf

Good luck!!

 

[l1nd3c0n]

- What is the best way to start a business? From what I've gathered there seem to be 2 main options - FA Tax, and Frilans Finans - is this correct?

Not quite sure which is easiest since you are an "alien"

- Are both FA Tax and Frilans Finans good for sole-traders, like me (1-person business?)

FA tax = Firma + Anställd (Company + Employee)
Which means you can have income from both a company and a job.

- Is applying for FA Tax as easy as they say? Fill out the form > send to Skatteverket > thats it? Do I need to fill out any other forms whatsoever besides the FA Tax form?

Yes and NO.
Application is as easy as they say, but in order to get an approval from the swedish tax authorities you need to convince them that you are aiming at a continuous business where you will earn money. This is a requirement in order to avoid everyone from starting a company just to retract tax for purchase of personell equipment.

- Is applying for Frilans Finans much more difficult?

Don't know.

- Is it possible to do a once-yearly tax declaration instead of a monthly one? I've heard monthly ones are much more common in Sweden. I'm asking because I really don't expect to be making much (or any!) money in the first year or two of business, and having a regular monthly tax taken from my bank account would hurt a lot!

Low turn-over = yearly tax payment
Over 1 MSEK = monthly tax payment

- How does MOMS and VAT work? I've read that this is an amount you should move straight from any invoices to an account for tax, PLUS an extra amount of tax. How much extra tax on top of MOMS and VAT would I pay - especially knowing that I'm also working full time?

Rule of thumbs = You charge 100 SEK, you reserve 50 SEK for VAT and tax (20 kr VAT + 30 kr tax).
As already answered above, moms is the swedish translation of VAT.

- What is the normal MOMS and VAT amount? Is it normal to have my charges inclusive of this when I bill someone?

To private people you always charge including VAT, i.e.. 100 kr (incl. 20 kr VAT)
To companies you invoice 75 kr plus 25 kr VAT (also equal to 100 kr payment)

Note: According to this site Swedish VAT is 25%, Australian VAT is 10%

- What is a recommended book-keeping software for my taxes? Is Excel ok? And what exactly do I need to record? My guess is money charged from a job > costs of that particular job > costs of equipment purchases/hire > costs of web services, internet bills etc.. is that all?

I know many says it is a requirement to have a specific software, but I am quite sure you could keep records on paper as well

- Can you claim website server bills, internet bills, electricity, phone or anything like that?

Yes, as long as it is related to your business.

- Can I claim for equipment I bought last year or the year before?

Yes. You can even claim for older equipment, but then you need to get an valuation of current value.

- Can anyone recommend a good place to go for insurance as a sole trader?

For photography Gefvert is recommended. Even my normal insurance company recommended me to put my photography insurance at Gefvert