Visual Artist claiming portfolio costs

Visual Artist claiming portfolio costs

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I have a client who is a visual effects artist in the tv and movie industry. As part of prospecting for future work and to develop his career it is necessary that he prepares short virals/films highlighting his skills which he sends to major film studios/Art Houses. The costs of doing so can be rather expensive as he has to hire other freelancers with additional skills to assist with this and the short films will never create income on their own. We would like to claim these costs against his freelance income as it is helping to prospect for future work. My only concern would be to HMRC trying to object to this on the basis that the expense is not directly related to the contract generating the freelance income. I was wondering what peoples thoughts on this would be.

Thanks

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By johngroganjga
11th Apr 2013 12:55

It seems to me that it meets the wholly and exclusively test without any difficulty.

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By tonycourt
11th Apr 2013 14:41

Revenue or capital?

Tricky one to call, but  the films could be viewed as either:

advertising or,an enduring asset  -whether or not  these are Intelectual Property is only important if he wants to claim WDA. In any event  they are likely to have no value to anyone else other than your client so I would take the view that 100% of the cost could be w/o and a  tax deduction claimed in year 1 or 2.  

The way I read your post it sounds like the client creates a different  film depening on who the potential customer is. Presumably therefore they will be updated regularly and parts, if not all, of the old films become morribund. If that is true and the original versions fall out of use within a couple of years I would say that teh cost of producing them constitutes a revenue cost and should be claimed as an expense. Otherwise WDAs should be claimed.

Tony  

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By Phil Rees
11th Apr 2013 14:46

Enduring benefit

If the costs establish an enduring benefit then, as pointed out by Clouseau, they are capital in ntaure. However I think I would claim capital allowances on them.

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By Avant-Garde54
11th Apr 2013 15:18

Enduring benefit

Thanks for your comments. Our client is in a very competitive industry and if they are to be scouted by the film companies for the higher budget films the quickest way to get their attention is by making a small budget special effects film and releasing online/send to agents to showcase their talents in the hope it catches someones eye so they are essentially advertising their skills. This appears to have worked for our client as he is being courted by some American film agencies as a result of the two short films made and could be moving oversea.The films were not tailored to prospect specific business from a client but were done with his own plot and design to show his creativity and his design skills to all of the film companies.

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By Phil Rees
12th Apr 2013 13:47

In that case

I would write them off to P&L as an expense entitled "advertising and promotion".

 

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