Guide cautions SMEs against unknown cost trap

The BusinessVillage website cautions against a kind of duty to be paid which is mostly unknown: irrespective of whether you are an entrepreneur in the goods-producing industry or having your own agency, you will have to pay so-called social art contributions, if for advertising reasons you make use of the services of freelance graphic designers, copywriters or journalists. In case of disregard of this rule, you will be fined and have to make substantial additional payments, if audited by the social insurance for artists. A short guide called “Social insurance for artists – a big unknown factor for companies and agencies” is available in order to make agencies and companies aware of the problems concerning the liability to make payments to the social insurance for artists.

When placing contracts to freelancers and advertising agencies, companies and agencies should pay attention to some important points in order to avoid unpleasant surprises. In his free-of-charge-brochure Mr. Andreas Frank explains what to consider when placing orders and describes the legal problems involved: “When discussing this subject with my clients I quite often looked into disbelieving eyes. Why should an entrepreneur working in mechanical engineering, who at first glance does not have anything to do with artists, have to pay social art contributions?”

In particular small and medium-sized entities, but also agencies quite often co-operate with freelancers and, thereby being so-called users, are automatically subject to paying contributions without even knowing about it. The consequences of an audit and possible additional payments may have effects on the company which might even threaten its very existence in the worst case. Companies and agencies, however, which are informed about their financial liabilities are able to avoid such unpleasant surprises by applying suitable pricing methods and forming liability reserves. GERMAN