Most artistic professionals are familiar with the juggling act needed to earn a living whilst progressing their careers, and the UK?s tax and benefits system often seems to work against them. Ann Bridgwood highlights some of the findings from recent Arts Council England research which draws attention to the balancing act facing artists and provides a platform on which to campaign for improvements in artists? working lives.
Prioritising individual artists is one of the Arts Council?s ?Ambitions for the Arts?(1). In 2002, a National Framework Plan for individual artists was drawn up, and a major programme of research was commissioned, focusing on artists? labour markets and their engagement with the tax and benefit systems.
The research programme had three strands:
? Clare McAndrew carried out an international review of tax and benefit provision for artists in six countries: Australia, Canada, Denmark, Germany, Ireland and The Netherlands
? the University of Warwick analysed existing data on cultural employment in the UK, and
? ran six group interviews with 47 practising artists from a range of art forms, to explore their experience of the tax and benefit systems.
The pattern of cultural labour
The research carried out by the University of Warwick estimated that the pool of cultural labour in the UK had increased from 610,000 in 1993 to 760,000 by the final quarter of 2000. An estimated 40% of those in cultural occupations were self-employed, compared with 12% of those in non-cultural occupations. The highest levels of self-employment were found to be among musicians (77%) and actors, entertainers and directors (60%).
During the 1990s, there was a relative decline in earnings for cultural occupations, from 20% above those for non-cultural occupations, to only 14% above by 2000. Although cultural occupations, as a whole, yielded higher earnings than non-cultural occupations, this advantage disappeared when compared with people at a similar occupational level. Musicians, for example, earn about 40% lower than the average for people with their level of qualifications.
Approximately one in 20 of those in cultural occupations was looking for additional work. Overall, this was not markedly different from those in non-cultural occupations, but about a tenth of actors, entertainers and directors were seeking additional work. On average, those in cultural occupations worked a shorter week ? 31 hours, compared with 38 in non-cultural occupations. The shortest hours were worked by musicians, with an average of 24 hours a week.
About 14% of those working in cultural occupations had non-permanent jobs, again comparable to those in non-cultural occupations: but about a quarter of actors, entertainers and directors and about a sixth of musicians were in non-permanent work. There was a higher level of multiple job-holding among cultural than among non-cultural occupations. This was particularly so among the self-employed, who accounted for most of the difference between cultural and non-cultural occupations(2).
How these features of artists? employment impacted on their working lives was the question addressed by the group interviews with practising artists.
The pros and cons of self-employment
The group interviews identified both benefits and drawbacks to self-employment. A major drawback was lack of job security, with an associated lack of access to benefits. Variable and sometimes low earnings made it difficult for artists to make adequate pension provision. The artists spoke of time spent chasing payment for work, and sometimes of not being paid at all. This was a key reason for multiple job-holding; some artists needed two or more jobs to make ends meet. Some took on professional work related to their artistic skills. This could dovetail well with creative work, but it also took time and energy away from creating. Others adopted a conscious strategy of taking on undemanding second jobs which did not impact on their creative work. Casual work had the advantage that it could easily be dropped if an opportunity arose for artistic employment.
Despite the pitfalls, the artists identified real benefits of self-employment. The greater personal freedom and flexibility were seen as helpful to creativity. For some participants, portfolio careers, in which they juggled different kinds of work, were stimulating and allowed them to retain control over their artistic careers.
Tax issues
Artists commented on the frustrations of the tax system, including a lack of clarity about their liabilities, and inconsistent treatment of artists by different tax offices. A particular theme raised was the complexity of taxation on overseas earnings. Artists are typically subject to a ?withholding tax?, which makes them liable for local taxation, sometimes at more punitive rates than residents. Australia, for example, charges a 30% withholding tax on copyright income, with no tax-free threshold. Artists can claim back the tax under certain circumstances, but it was clear from the group interviews that the time, effort and expense involved often outweighed the benefit. Some found themselves out of pocket when working abroad, particularly if they incurred additional expenses such as childcare costs(3).
One initiative to ease the tax burden on artists is the Republic of Ireland?s 1969 Artists? Exemption Scheme. Under Section 195 of the Taxes Consolidation Act of 1997, the Revenue Commission is empowered to determine that certain artistic works are original and creative ? i.e. a unique work which is brought into existence for the first time as an independent entity by exercise of its creator?s imagination. Artists resident in Ireland are exempt from income tax on earnings from sales or copyright fees from such works from the year in which the claim is made.
To qualify for the exemption, a work has to have either cultural or artistic merit. Cultural merit ensues if the contemplation of the work enhances the quality of individual or social life by virtue of that work?s intellectual, spiritual or aesthetic form and content, and artistic merit exists when the work?s combined form and content enhances or intensifies the aesthetic apprehension of those who experience or contemplate it. In 2001, 45% of exemptions were granted to paintings, 21% to books, 13% each to musical compositions and sculptures and 8% to plays. A criticism of the scheme is that it is not applicable to performing artists, such as actors, who cannot claim tax exemption for performances(4).
Benefit systems
The artists taking part in the group interviews identified several concerns about the benefits system. Among them was a lack of clarity about eligibility for benefits ? particularly as many artists are simultaneously employed and self-employed. Participants argued that the rules surrounding benefits did not recognise the reality of the pattern of artists? employment. The difficulties involved in signing on and off when offered short periods of work meant that some decided not to bother claiming.
The Netherlands presents an interesting use of the benefits system to help artists establish their careers. Citizens whose income falls below a certain level are entitled to claim social security on condition that they acknowledge the obligation to apply for jobs and perform suitable work. After six months, the government can insist that the person either accepts a job or returns to education. Under the Income Provision for Artists Act of 1999, unemployed artists are allowed to keep up their artistic work and attempt to establish themselves after the six-month period in return for a lower benefit (70% of the normal rate).
An artist can use this special provision for a maximum of four years, within a ten-year period. To be eligible, their income must be below a defined minimum and they must prove that they practice art on a professional basis. Applicants are screened by an independent advisory body and the screening includes an assessment of whether the artist is ?professional? or not. A ?flanking policy?, designed to help artists establish a self-sufficient practice, provides small amounts of financial support for legal and financial advice, education, training or investments for their new business.
Ann Bridgwood is Director of Research for Arts Council England. t: 020 7333 0100;
e: ann.bridgwood@artscouncil.org.uk
The published reports referred to in this article can be downloaded at http://www.artscouncil.org.uk/ information/downloadable_research.html
(1) Arts Council England (2003) Ambitions for the arts 2003-2006. London: Arts Council England.
(2) Davies, R. and Lindley, R. (forthcoming) Artists in figures: a statistical portrait of cultural occupations. London: Arts Council England.
(3) Galloway, S., Lindley, R., Davies, R. and Scheibl, F. (2002) A balancing act: artists? labour markets and the tax and benefit systems. London: Arts Council of England.
(4) McAndrew, C. (2002) Artists, taxes and benefits: an international review. London: Arts Council of England.