News that Meghan and Harry are planning to cut ties and go it alone in pursuit of a ‘progressive new role’ has garnered a lot of attention in the media. If this ambitious new role takes them down the route of contracting (and if it does, who could blame them?), one wonders just how the royals will take to this new way of working.
We’d happily encourage Meghan and Harry to take charge of their career and seek the freedoms that come with being your own boss, so we thought we’d put some advice together to help them get to grips with what they need to know when they trade in palaces for pay sheets. Meghan and Harry, you’re welcome.
Not everything can be claimed as an expense
It’s no secret that the royals enjoy a wedding. Meghan and Harry’s 2018 shindig, totalling a colossal £32 million, was courtesy of the UK taxpayer. And the spending hasn’t stopped there, as it looks like they’re set to move into their newly renovated abode which cost a hefty £2.4 million to complete.
But the pair will have to tighten the pursestrings when they venture into their self-employment journey, as only certain costs can be claimed as legitimate expenses if they’re ‘wholly and exclusively’ for the purpose of the business.
Networking is key to success
In business terms, networking refers to the process of making new contacts. But what does this mean in the world of royalty? The good news is that the process wouldn’t really differ for Meghan and Harry.
As Meghan has previously worked as an actress, she will have a list of contacts should she wish to return to this profession. The film industry is constantly evolving; networking is an essential skill in which Meghan will find useful when on the search for her next role. For Harry, we’re unsure whether the military provided many opportunities for networking, but it’s likely he made a connection or two outside of work.
Charitable donations will need to be declared
The royals are no strangers to charity work, but any philanthropic endeavours will be handled a bit differently when they step out of the royal spotlight. It’s unlikely they’ll be cutting many ceremonial ribbons or scaling mountains in the name of charity, though they may still continue to donate through their new organisation.
Any of these charitable donations need to be declared through their company if the pair want to claim tax relief.
Becoming financially independent
Meghan and Harry have stated that stepping down as senior royals will mean that they will no longer be eligible in receiving funding from the Sovereign Grant. This money pays for the cost of any royal duties which are carried out, and totalled £82 million during the year 2018-19.
Without the Sovereign Grant, they will become financially independent members of the Royal Family. This is similar to leaving permanent employment in favour of working as a contractor, due to the absence of an expected, regular income. If they decide to become self-employed, they will have to rely on the availability of contracts to ensure they have money flowing into the bank.
Clarify whether a contract is in the public or private sector
The Royal Family falls between the public and private sector (not being government owned but funded by the public), but Meghan and Harry will need to iron out any ambiguity and determine whether their contracts fall in the public or private sector when it comes to the subject of IR35. While it’s the end-hirer’s decision in the public sector, until April 2020, those working in the private sector are still free to determine their own status.
Travel costs can’t be claimed after 24 months
The couple will reportedly be splitting their time between the UK and the US, so if there’s a business venture taking them between the two continents, they could claim these costs as a business expense as long as their assignment lasts for no longer than 24 months.
Childcare arrangements will need to be made
Giving up their titles means giving up the perks that go with it, and this includes baby Archie’s royal nanny. If the pair need a break, it’s good news the self-employed are still free to claim for the cost of childcare through their business, providing certain conditions are met.
In order to claim under the Tax-Free Childcare Scheme, the royals must work over 30 hours a week, and earn less than £100,000 a year.
Thinking about self-employment?
If, like Meghan and Harry, you’d like to switch your royal aide for an accounting partner, we’re here to help. Whether you’re looking for advice to go it alone or you want a helping hand with your new financial responsibilities, give us a call on 01523 843189 or drop us a message.