The ‘Not-so-glamourous side of the food styling business’
The ‘Not-so-glamourous side of the food styling business’
(i.e. insurance, book keeping, tax and super obligations)
Disclaimer: the following information is provided as a general guide only. Please seek expert advice for your business from qualified professionals.
I get lots of enquiries about how to get into food styling. It’s such an interesting and creative career. But, unless you already have an agent who will take care of the business side of things, read on. After the heady excitement of getting your first few jobs and stumbling your way through initial invoices, you will start to realise that there’s more to the business than your food + styling skills. The following list and links will help you with some of the decisions you need to make when starting your own business, as well as your obligations.
I have put this blog post together in May 2023 to help anyone starting out in this industry in Victoria, Australia. The information I have included is current at this time but may be subject to change.
1. ABN
An Australian Business number (ABN) is useful when setting up your business. Please follow the links below to see what you need to do and whether you are entitled to an ABN.
https://business.gov.au/registrations/register-for-an-australian-business-number-abn
https://www.abr.gov.au/business-super-funds-charities/applying-abn/abn-entitlement
Starting out, it can be confusing as you may get conflicting advice about the status of your employment and whether you need an ABN.
‘You're not entitled to an ABN for work that you carry out as an employee – including as an apprentice, trade assistant or labourer – even if you or your employer calls it contracting. An employer shouldn't ask you to get an ABN as a condition of employment.
For more information, see Employee or contractor External link on the ATO website.’
Source: www.abr.gov.au
2. Register business name
It sounds obvious, but you should register your business name. See how to do it, here.
https://business.gov.au/registrations/register-your-business-name
3. Sole trader or company
I started in my business as a sole trader. As my work increased, I needed an extra pair of hands. At this point, my accountant suggested that I set up a company as my assistants were classified as workers and were entitled to be on payroll as employees, with other benefits, including superannuation, workcover and insurance (see more about that later).
4. Register for GST
I decided to register for GST when this tax system was first introduced. This means that I need to submit quarterly Business activity statements (BAS). I look at this as a way of making my tax return easier, as it keeps my records organised. I use a book keeper for this (more on book keeping later). In my experience, it is money well spent. Here is some information below to help you decide if you need to register for GST.
‘Not every business or enterprise needs to be registered for GST, but penalties may apply if you fail to register for GST when required to do so.
You must register for GST:
when your business or enterprise has a GST turnover (gross income from all businesses minus GST) of $75,000 or more (the GST threshold) – see Working out your GST turnover
when you start a new business and expect your turnover to reach the GST threshold (or more) in the first year of operation
if you're already in business and have reached the GST threshold’
source: www.ato.gov.au
https://www.ato.gov.au/Business/GST/Registering-for-GST/
A little note on applying GST to food costs. Most food that you purchase is GST free. However, as a food stylist, you are applying a service to the food that you purchase for a job (unless you are simply buying milk to go in the fridge at work). As such, you should apply GST to your food receipts in your invoice. (Note that this doesn’t apply if you are not registered for GST).
5. Workcover insurance
Generally, you must register for WorkCover insurance if you or your company employs any workers in Victoria.
You don't need to register if you're a sole trader, an individual in a partnership or an individual trustee of a trust and you don't employ any other people as workers.
https://www.worksafe.vic.gov.au/do-i-need-register-workcover-insurance
6. Public liability insurance
My insurance broker organises my business insurance, which also includes public liability insurance. I suggest that you get expert advice and get the insurance that suits your business. I’m often asked to provide my Certificate of Currency, which shows that I am insured. This covers my employees as well.
What is Public Liability Insurance?
‘Have you ever accidentally damaged someone else’s property while out on a job? Has a piece of faulty equipment you are using caused an accident? If you have ever found yourself in the awkward position of having accidentally caused someone else a loss or injury in the course of running your business, then you will be able to see the value of a public liability insurance policy.
Public liability insurance is designed to protect your business against claims resulting from accidents or injuries that occur as result of your business activities, as well as accidental damage to property owned or controlled by someone else.
As a business owner you are accountable to third parties that come into contact with your business – including customers, suppliers and anyone else who may be involved with your business. If damage or an accident occurs while you’re carrying out your business, the impacted third party may be able to make a claim against your business, which can result in costly legal fees as well as the obligation to pay for the damage or injury you may have caused.
If you work with clients or customers, in public spaces, visit spaces owned or controlled by others, have visitors to your premises, or manufacture products; public liability insurance is your best defence against potentially costly personal injury or property damage claims.’
Source: https://www.cgu.com.au/blog/public-liability-guide
While it’s not a legal obligation in Australia, it’s strongly recommended all businesses consider public liability insurance.
‘Can I get public liability insurance if I’m self-employed?
Yes, you can. Anyone in business can get public liability insurance. Public liability insurance can help your business handle the cost of third-party claims for injuries or property damage, and those who are self-employed probably face enough costs already without those added on. Sole traders can also get public liability insurance, and you can find out more in this guide to business insurance for sole traders.’
Source: https://www.comparethemarket.com.au/business-insurance/industry/sole-trader/
7. Obligations for paying assistants. Worker vs contractor?
My business is set up as a company, so my assistants are my employees. I pay their super guarantee entitlements. More about super below.
See the links below to work out whether someone who works for you is considered an employee or a contractor. Seek expert advice if you are still unsure of the difference.
https://www.ato.gov.au/business/employee-or-contractor/how-to-work-it-out--employee-or-contractor/
8. Superannuation obligations
Be aware of your obligations to pay superannuation to workers and contractors. Please seek appropriate advice. I have put some information below.
https://www.ato.gov.au/Calculators-and-tools/Super-guarantee-eligibility/
‘From 1 July 2023, the Super Guarantee will increase to 11%
You are responsible for classifying your worker for tax and super purposes and you need to get it right. If you make an incorrect decision, you may face penalties. If you are engaging a worker who you believe is a contractor, you can choose to pay them super to ensure you are not liable for the superannuation guarantee charge (SGC). You will need to pay any super contributions directly to their chosen superannuation fund and should include this in your contract with the worker.
Contractors
You must pay super for contractors if you pay them mainly for their labour. This is the case even if they quote an Australian business number (ABN).Their earnings amount is not relevant.
Self-employed
If you're self-employed as a sole trader or in a partnership, you do not have to pay super guarantee for yourself.’
Source: https://www.ato.gov.au/business/super-for-employers/work-out-if-you-have-to-pay-super/
9. Book keeping obligations
Don’t forget to keep good records. I recommend using an accounting software package. I use Xero and find it excellent. There are other good accounting software packages too. I recommend seeking out a good book keeper as they can help you set up your systems, which will save you time in the future.
Also, I would highly recommend using an accountant for your tax returns. They can provide valuable advice for your business.