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Getting paid and making declarations to HMRC

Fraser Jarvis

Well-Known Member
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1,910
Was just wondering how an amateur musician would go on as regards making declarations to HMRC, obviously if your a professional player you would be set up as a sole trader or limited company and make declarations accordingly, but what if you had a different job, for example you worked for someone as a builder or you owned your own building company, but were gigging twice or three times a week and getting paid for it would the said amateur musician have to inform HMRC and declare the extra income on their tax return and possibly get taxed on it?
 

Nick Wyver

noisy
Subscriber
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5,949
Of course you should do this. But most (all?) of the musos I know who have other jobs don't bother. I guess it's entirely up to your conscience.

I'm a self-employed musician so all of my earnings get declared. Not that that actually amounts to much.
 

kevgermany

ex Landrover Nut
Subscriber
Messages
21,947
Keep it legit. Talk to a tax adviser/accountant. You will probably find that a lot of the things associated with the sax can be offset against earnings. - reeds, repairs/services, equipment, travelling expenses, insurance, accounting fees.... And then there aren't any worries about a large, unexpected tax bill and a possible criminal record.
 

Pete Thomas

Chief of Stuff
Commercial Supporter
Messages
13,963
You may well he found out if you don't declare it, especially when paid by cheque. Usually the cost of an accountant is well worth it. You can declare the earnings yourself, but accountants who know about musicians can save more off your tax bill than you pay them, which at a semi pro level is usually only a couple of hundred quid or so.

A limited company is not really necessary, it can save money once you are earning over a certain threshold, as can becoming VAT registered.
 

noelweston

Member
Messages
46
Pretty much what they all said - bear in mind that if you don't declare and other members of the band or the venue you're working at do, you can still get found out. (e.g. do a gig in a pub - they declare that they paid you a total of £xxx for the whole performance (despite this being split amongst 4 or 5 players). HMRC then extrapolates this amount paid to you to twice a week, 52 weeks of the year, and basically demands the tax on that. It's then up to you to prove that you DIDN'T earn this amount... My bandleader got caught this way, but had enough records to prove that there weren't that many gigs, and almost all of the money was paid out to other people.)

Keep records of everything - mileage to gigs and rehearsals, instruments, reeds, stage clothes, dry cleaning, etc. - most of it is offsettable against any tax bill. For very small declared amounts, if your other tax & earnings are simple, HMRC may advise you that you no longer need to fill in a return or declare the extra.

The cost of employing an accountant and paying the tax will be small; the cost of a full tax investigation runs into thousands of pounds if you get picked out.
 

Pete Thomas

Chief of Stuff
Commercial Supporter
Messages
13,963
Keep records of everything - mileage to gigs and rehearsals, instruments, reeds, stage clothes, dry cleaning, etc. - most of it is offsettable against any tax bill.
A good accountant will know how to safely declare about things you didn't think about,e.g. it's reasonable to assume you needed to buy trade magazines for which you don't always get a receipt. Haircuts, stage clothes. All kinds of little things that add up.

Because my living is from writing music for film/TV I can claim a cetain amount of going to the movies, renting DVDs etc. as research.

I have been through several accountants recently, I now have a good one who is not expensive. It's important that they understand the music/entertainment business.

Plus, if it's a reputable accounting firm, HMRC will tend to trust them. If you do your own accounts, they might feel they have more reason to investigate you.
 

kevgermany

ex Landrover Nut
Subscriber
Messages
21,947
I always get the feeling with tax that it's 'Guilty until proven innocent' and even then, there's no guarantee that they won't change something or think of something they missed and come back for a second go. Different laws here, but a friend doing everything through accountants believing he was legit, ended up in prison, with a criminal record and a tax bill that was more than his house was worth. plus big legal and accountancy bills trying to defend himself... OK, the numbers were a lot higher than a muso doing a few gigs, but.... Remember as a muso you're very public, and easy to check up on.
 

Fraser Jarvis

Well-Known Member
Messages
1,910
Thanks everyone for your positive feedback so far (apart from one).

At this point i must make it quite clear that a raised the question based on a hypothetical scenario, and in no way was making any reference to my own situation, as basically i don't play to well and certainly nobody in their right mind would consider paying me to play.
 

kevgermany

ex Landrover Nut
Subscriber
Messages
21,947
...as basically i don't play to well and certainly nobody in their right mind would consider paying me to play.
Don't put yourself down,:w00t: there a lot of people amking a lot of money out of music that many of us would consider unable to play/sing..... >:)
 
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