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Hi folks
This year I've decided to start declaring my music earnings (starting with 2016-17). I've done a few dep gigs for a high-profile function band who have paid me via bank transfer from their company account, so this is likely to make me pop up on HMRC's radar at some point. I'd like to pre-empt that by going legit.
This will be the first time I've done this, so I'm wondering if there's anything I should be particularly aware of before I complete my tax return? I have detailed records of all income and expenses, so the numbers are ready to go. I'm full time employed in my day job and am a 40% taxpayer. According to my figures, my expenses for music are comfortably above 40% of my additional earnings, so I THINK that means I won't have a bill to pay?
In terms of my gigging life, I play in several different bands, with somewhat fluid lineups, and none of the bands is a legal entity in any way (no band bank accounts or contracts etc - we're just mates who gig at weekends basically). I'm not officially set up as a sole trader or self-employed - I'm hoping I can simply declare the my gig money as additional earnings on my tax return and then declare the costs too.
Does this all sound sensible, or am I about to open a huge can of worms?
Oh, I am a MU member too so I could potentially call on their advice if things get tricky.
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Comments
Depending on the total, you can ask them to just adjust your tax code on your primary job to spread your tax bill over the year.
My Trading Feedback | You Bring The Band
Just because you're paranoid, don't mean they're not after youGoing legit is by far the cheaper option than getting caught and receiving a fine.
Rift Amplification
Brackley, Northamptonshire
www.riftamps.co.uk
... and you could probably show that while you took some decent money for your work outside of your day job, you spent so much on getting the work that you don't actually owe a great deal of tax on it. You pay tax on profit so make sure your accountant manages to minimise your profit!
Seriously: If you value it, take/fetch it yourself
I guess any accountancy fees I may incur in future could also be declared, so @RiftAmps point is a good one. Maybe I'll see what happens this first year and then set something up in good time for next year's books.
I've assumed that big instrument purchases are best left off though, especially since there's always a chance that I might sell something on again. Does that sound sensible? I'm also not declaring any music gear I sell as income, so I guess that balances out.
Trading feedback here
I record mileage using the Tripcatcher app and it syncs with my Xero accountancy software.
As far as things I've had done in the current tax year prior to any gigging/recording contracts from me to me, I'm wondering, how do I get my instrument expenses bought out of that so I can be open about what I do and why I do with HMRC and have it a business expense for me and use that to IDK, go shopping and repairing whilst preparing. As far as getting demos cut, I'm networking but probably in all the wrong places seems it seems/seemed even (past tense/no more) to be all talk, but even now that talk is changed, and I'm dedicated to my music.
I'm not yet earning/making a profit, it's all deductible from -£0 profit. but in the event I ever do make money out of performing and writing and recording, I would like to go in house/independent and see how far I can take it.
The thing about my record label, sorry, I'm going to plug the business real quick..
Is to give profanity a chance.
To give controversial a chance.
To get a contract to somebody who I'd have to manage very hard since I'm looking for the ones who like music, but scare others away, who would probably be up to no good if it wasn't for me, but to stop anyone robing anyone and letting talent I could use wasted somehow, someway, I figure look for the next angry whatever, and be a good manager/producer to them, argue, inspire, muscle, whatever it takes that I can do, needs to be done, to get them where they're needed ready for what I need them to do, if they're angry/unruly/disrespectful. - If not and I find a little charm/delight to work with, that's just a bonus; someone who has good music, and a good work ethic, who can sell.
I'm also looking to give powerful songs a chance like blues and sorrow or even love, so not all controversial, but if someone's in pain and wants to pour it on mic and that pain gets released or whatever, and it sounds good how they deliver it and they're genuinely a tortured artist, I want to manage them and help them, if they sound good/can sell.
If I feel I can't help an act, I'd try sell their contract on to a bigger/better label so I won't hold any acts back from going further than I can take 'em, I just want to be that foot in the door - if I love it.
But I do want to invest and boss musicians/work with musicians, for the greater good/the records/music/freedom etc.
Auto tune... I'm not against it, but I'm not for it, I'd be open to all sorts of crazy new sounds everyone else is doing, but that's the thing, everyone else (in hip hop now) is auto tuned the f' out so, why bother?
Just because I live in my music room.
5 Watt Amp, ? Watt PA Box, and a power pack for an FX and the electric heating in here and wifi for all the streaming backing tracks.
Hmmm...
I should re think my life and expenses and what I should/could/ought to be doing, sign myself up, pay me my money, list everything but the food (it seems) as an expense, to put in the red so I can see how much I'd need to make to put it in the black/making a profit on my life trying to be a professional musician.
A thought on "Partnership" rules. maybe it doesn't apply if you're depping most of the time, but if you have a regular gig and the band finds itself with a financial liability, the default legal position is that any gear you use in furtherance of the band's business (your instrument, backline etc) is assumed to be part of the band's assets and you could therefore lose it. Check the MU for more on partnership agreements because it is acceptable to have one that says (for example) "The band owns the van the PA and the light rig, but does not own any instruments FX or backline". But you have to have one that says what you want it to, as the legal default is definitely NOT what you want.
Seriously: If you value it, take/fetch it yourself
Seriously: If you value it, take/fetch it yourself
My Trading Feedback | You Bring The Band
Just because you're paranoid, don't mean they're not after youWould there be a way to declare myself as a freelance so that my tax affairs don't drag anyone else into it? There's no actual shared equipment in any of the bands - each item is owned by one individual and paid for solely by them. We don't have a shared van either.
Trading feedback here
Trading feedback here
What about things like computers, tablets that will rapidly depreciate over time?
Trading feedback here
Seriously: If you value it, take/fetch it yourself
The important thing is you must keep written records of income/expenditure and receipts for anything you claim as an allowable expense. Most of what you purchase will fall under the heading of revenue expenditure, I recall someone at the tax office telling me they tend to regard "tools of the trade" as revenue, not capital, I reckon that would cover guitars..?
I honestly don't think you need to pay an accountant to answer questions the HMRC helpline can answer. Some of the stuff on the website can be quite daunting but I have always found the helpline staff very, er, helpful.
I've been self employed in various guises over the years, at one time I tried to earn some money as a photographer but my earnings were well below what it cost me in equipment, film etc (pre digital age) and TBH I didn't bother declaring it, just made sure i could prove I hadn't made any money if the taxman came knocking.
Remember, it's easier to criticise than create!