Newfaces, newcomers and younger models are often faced with the question of which legal form is right for you. If the first jobs in a model agency are made, it goes to the fee compensation on the part of your agency. It is advisable to start as a small trader (or small business) at first. You are still underage? Then the effort is a bit bigger. What you had to consider, you can find here in the Model Blog under Model werden mit 14, 15, 16 & 17 Jahren. Today we want to give you a few tips. No matter if you live as a model in Berlin, Munich or Hamburg.
This article gives you a first overview. If you decide to work as a model, always talk to your parents or a tax advisor before taking any risks.
The right legal form for young models and self-employed people
Small businesses are uncomplicated. This is how they differ from the classic businessman. Influencing factors include the amount of turnover or profit you generate. The name already says it, they are small-scale trades. You can make a small business as a model full-time and part-time, so you are flexible as far as your livelihood is concerned. You don’t need your own business premises and the annual financial statement is done quickly. Unlike a businessman, you can calculate your profit in a simple income statement (more about this later).
Advantages and disadvantages of small business at a glance:
- Little effort, no start-up capital – The establishment of a small business is informal, inexpensive and therefore very uncomplicated.
- Instead of extensive annual financial statements, simple bookkeeping (income statement) and a quick VAT return are sufficient – according to the BGB, you are not obliged to keep accounts, you do not have to prepare a balance sheet and you can easily prepare your year-end profit using the EÜR. To do this, you only have to enter the things that are relevant for you in the VAT return.
- Caution (!) you are always liable with your private assets.
- Full-time and part-time – As a model you can keep your flexibility and work part-time or concentrate fully on your modeling career.
Small business start-up for models – it’s that easy
As you have already seen in the advantages and disadvantages of starting a small business, you do not need any start-up capital. How much you invest in your small business is up to you. Unlike a larger business, you may only use your first and last name, that is, no proper names or pseudonyms. The prerequisite is that your turnover in the first business year (probably) does not exceed 17,500 euros.
If you now decide to become a self-employed model, your path starts at the trade office. Here you need your identity card and some cash (about 30 euros) for the registration.
The second important part is the tax office. Your business registration is automatically sent to the tax office. You will then receive a final form, a questionnaire. This is important, because here you specify once again that you are taking advantage of the “small business regulation”.
Caution, private liability!
As a small business owner, you are always liable with your private assets. Refrain from making large purchases and try to keep your small business profitable.
Small Business for Model Jobs: Accounting
The trade office and tax office have all the paperwork and you’re good to go! Now you just have to pay attention to a few things when it comes to invoice and taxes:
- Sales tax: You do not have to make a sales tax advance payment to the tax office. Therefore you are not allowed to take any sales tax.
- Invoice: If you issue an invoice as a model according to the small business regulation § 19 UStG, you do not show any sales tax. The following words must be on each of your invoices: “As a small entrepreneur, in the sense of § 19 para. 1 UStG, VAT will not be charged.
- Annual accounts: At the end of the year you have two duties. You have to make your income statement and submit a VAT return. However, according to the small business regulation § 19 UStG, you only have to fill in the following points that are crucial for you
- Tip. As a small trader you are automatically a member of the IHK. If your profit is less than 5200.00 euros, membership costs you no fees. This allows you to use all the assistance, services and advisors of the Chamber of Industry and Commerce (IHK).
Now that you’ve learned a lot about being a self-employed model, you know what it takes to turn your passion into a career.
Revenue and expenditure account for the annual financial statement
The income statement (EÜR) is the simplified form of profit determination at the end of the year. For freelancers and small businesses like you, the perfect way to quickly compare profits and losses. Decisive for all calculations is always the cash flow on your account. If you issue an invoice at the end of the year, but only receive the credit in the following year, it will only be included in the EÜR in the coming year.
You can either use the EÜR annex in your VAT return or (as a small business) make a completely informal profit determination, for example as an Excel spreadsheet.
How long is a small business good for models?
Most of the time, your acquisition costs increase with your sales. That is, the more jobs you do, the more expenses you have. Maybe for a car, a railcard or a second smartphone. As soon as your acquisition costs increase, among other things, the accounting of sales tax is more and more interesting for you. If you are starting to make a living as a fashion or catwalk model, we recommend you make an appointment with a tax advisor you trust! Until then, good luck with your start-up.