Authors and money– Panama anyone? Moira Butterfield

A practical ‘author housekeeping’ blog today, folks. I’m assuming that, just for once, you don’t need my advice on rhythm, rhyme, teddy bear usage etc.

Instead I’d like to comment on the news this week.

“What?” I hear you say. “Has this blog changed tack? She’ll be mentioning celebrity shenanegins in a minute!”

Don’t worry. I have no intention of revealing the many secret shocking things I know about famous people. 

It was the Panama leaks that got me thinking, specifically the news that the Duchess of York had some sort of hidden offshore company to store the earnings of her ‘Little Red’ picture books. 

Er…I can’t remember them, to be honest, but nice to hear she made a few quid, if she did. 

(Aside - You never know with newspaper reports that celebs have earned loads from writing. Occasionally I’m told such reports might have a tiny touch of PR and therefore may not be entirely accurate…).  

But anyway, the papers went on to describe the Duchess’s finances as ‘chaotic’, so that is more proof that she’s a creative professional, surely! Bless.

But we really mustn’t be chaotic, people. Most writers are some way down the earning tree and therefore have to pay tax in the normal way, and that’s where I can help with some sage advice based on my own experience. You may spend your days having fabulous creative thoughts, but a small portion of your time must be spent getting your accounts up together if you earn money from writing. 

The UK tax people have been very interested in me over the years, and that’s good to know, isn’t it? As a self-employed author I may be a small-scale ‘sole trader’ but I could be stashing away the loot, after all. I've been tax investigated twice. On both occasions I had just had a baby and my earnings had plummeted. My accountant thought that might have triggered the investigations, though it's impossible to find out. Perhaps I was hiding earnings away in the nappy bin? They had a duty to find out. 

They could just as easily swing their never-sleeping eye over to you, and if you live in countries elsewhere I expect you have your own version of our UK tax friends.

For the first investigation I did not have investigation insurance, and it cost me £1,000 in accountancy fees. During a UK investigation you are interviewed more than once in a small room, like the sort of room you see on crime shows, and you need your accountant with you - and that costs money.

First piece of advice: In the UK you must get yourself investigation insurance if you have self-employment earnings. Check your position in other countries. You can get it from an accountant or, in the UK, from the Society of Authors if you are a member. Very weirdly, days after I wrote this blog I got an email from the SoA - if you want to go on their scheme for next year and you are a member you have to join by April 27th and it costs £12. 

Second piece of advice: You must keep your author earnings accounts up together and, unless you keep really accurate weekly records of all your incomings and outgoings, keep your work earnings separate from your personal spending accounts in some way. In the UK the tax investigator will want to look at work accounts going back five years, and all your personal accounts, too. If you can’t separate the two easily it gets complicated. I do keep mine entirely separate, and it was still complicated. You must account for every payment that has gone into your personal account going back five years. Unless you can prove otherwise it can be assumed to be work earnings you failed to declare. In other words, if Grandma once gave you a birthday cheque, for example, you may have to prove it came from her.  

If you live in other countries, you may not get these investigations, but I'm sure the advice still holds true - Keep your work accounts tidy. 

The thorough UK taxman did catch me breaking the rules.

In the first investigation he found one thing wrong - a packet of Opal Fruits and a £4.50 toy golf set on a petrol receipt that I had put through my accounts. I was rightly given a telling-off.

In the second investigation the tax lady said I’d claimed too much for travel because ‘writers don’t go out’, and though I’d recently written a series of round-Britain history books she wasn't having it so I was fined a small amount.  If I wanted to argue, she pointed out, she would take it upon herself to fine me for an assumed five years of over-claimed travel. So best not to. I can't tell you how much travel UK authors are actually allowed to put into their accounts, by the way. Nobody can tell you. It's up to a tax investigator to judge. Perhaps I should have offered mine an Opal Fruit...

So listen up. If you want to stay calm enough to write, you must keep evidence of your earnings in perfect order, ready for anyone to see. 

Don’t neglect this dull and tedious side of writing.

Unless your assets are offshore, in which case don't worry. You can do what the **** you like.   

Moira Butterfield 

@moiraworld

www.moirabutterfield.co.uk 

Latest picture books: 

The 'Everybody Feels..." series by QED 

I Saw a Shark - Ginger Fox 

How much to charge for fee-only picture book text

Moira Butterfield

Before you read this, I just want to point out that I’m not intending to depress you. I’m out to offer some sensible tips. All the examples mentioned below have happened to me in the past, so learn from my mistakes.

A number of major mass-market UK publishers have recently declared their intention of moving ‘upmarket’.  They are producing picture book material which they hope will compete with the picture books published by more traditional publishers, possibly in the same outlets.

These mass-market publishers are big players internationally, selling rights to other similar publishers around the world. If you’re reading this in, for example, the US or Australia, you will see the material I’m talking about in due course.

These publishers are now aiming to produce ‘upmarket’ picture books. I’ve put that word in inverted commas because, although these picture books are structured in the classical way, and are deliberately designed to compete with what might be described as ‘classy’ picture books, the economics behind them are not the same.

Mass-market publishing companies do not pay royalties. They want to own content so they can exploit it financially in any way they wish to make as much revenue as possible and- importantly for them - have an asset that they could perhaps sell at a future date. Owning content is the 21^st century buzz phrase of media conglomerates.

What does this mean for picture book authors? I’m not going to say whether these fee-only books are good or bad, and I can’t predict how they will affect sales of more traditionally-modelled picture books. They are a lot cheaper and it’s unlikely the public will differentiate in a shop between the two. But that’s not my thread here. It’s up to the traditional publishers to defend their market sector, I guess.

What I want to say is this. If you are asked to provide a picture book text and you are offered a fee- only deal - and you want to consider it - be prepared. Be aware and do it with your eyes open.

(I know that there will be people out there who will howl at the idea of doing fee-only work, and congratulations to them if they can make a living and pay all their bills on royalty projects alone. This is advice for those who might wish to say yes.)

Why would you say yes? Well, you might be a new author or illustrator who wants to get into print. This may be a valid way for you to do it. Assume, however, that you won’t be informed of sales figures and you won’t be publicized as a star author. The publisher owns the content, not you, and they’re not interested in paying anything extra for a ‘star author’. Follow-up titles are not guaranteed, and if they do turn up it’s possible that someone else could be asked to do the text.

In other words, don’t offer a fee-only picture book publisher your most cherished ideas. I don’t mean do a shoddy job. I mean don’t give them your prize idea. The one you’ve been working on for two years. The one you think is brilliant.

The same rules apply if you are an experienced author with a track record, but you need the income. No problem there, but don’t hand over your most precious ideas. You might, in this case, want to consider working under a pseudonym. You’re not going to get paid extra for your name. On the other hand it could be valuable for you to have your name visible on book covers all over the place – supermarkets, for instance. That judgement is up to you. If you have an agent, chat to them about it.

You might get a great editor, but you may instead find yourself dealing with a very inexperienced and heavily-overworked young editor (many older more experienced editors having been made redundant from all sorts of publishers during the recession, to save on wage bills). In the case of a fee-only job this situation could have consequences. That young editor might start messing up your text and you don’t actually have any rights to say ‘no’ to changes. However, you can point out, in a positive and helpful way, why the suggested changes might be bad. It’s possible that nobody else is going to be helping that young editor learn their work.

When you agree to the job, make it clear that you want to discuss changes made (that you want to help and you will not slow down the schedule, which is likely be very tight). You might also want to point out if you have built a rhythm into the text (it sounds crazy, but believe me, very inexperienced editors may not notice).

You may be asked to do publicity. You’re not going to generate any extra royalty money from the effort, but you are going to raise your profile by doing so. This is a valid reason for agreeing, but make sure you get fair expenses (see Society of Author rates).

The fee….the big question. What is fair? Well, publishers should not pay board book rates for picture books. By that I mean the rates they might pay for a 4 or 5-spread mini story or learning text (around about £300-£500, say, but of course it varies). Picture books, as we know, are more complicated delicate mechanisms and should be properly valued.

We can do that as best we can collectively but, having said that, we are up against the ‘I fancy a go at writing’ brigade. A leading UK art agency has done a deal with one of the publishers I’m thinking about, offering them the picture book ideas of all their illustrators. In the deal, the text itself hasn’t been given any value, basically. Presumably the editors are going to try to bash the ideas into shape.

Yup, sorry, I did say I wasn’t going to depress you….But there’s nothing we can do about that sort of deal. All we can do is value our work as best we can. It’s up to you to say yes or no to a fee, and it will depend on your individual circumstances. But if you want to say ‘yes’, don’t agree to a board book rate.

These publishers are likely to be doing costings on big sales figures. You could even ask your editor what the projected sales figures are before you say yes. Why not? They will have a figures spreadsheet with the information on it. I don’t see why you shouldn’t know before you agree to your fee.  

As a ballpark figure I’d make a suggestion of £1500. That seems eminently reasonable. You could even go in higher and see what happens. Perhaps you’d be prepared to take a tad less. But if the publisher scoffs and offers you a board book fee my advice would be to say no. 

www.moirabutterfield.com
@moiraworld