Recording and managing business accounts is far from the most exciting and rewarding part of running a business. For performers such as musicians, artists, actors and dancers, this aspect of being self-employed is no less important.
With the changes to the tax filing method that come with HMRC’s digitisation of the system, performers, as other sole traders and small businesses, will be expected to submit Self Assessment returns quarterly as of April 2018.
So does this impact what you can claim? And what can performers claim, anyway? This article provides an outline of the different deductions and claims you can make from the expenses you encounter in your career.
According to the Income Tax Act of 2003, Section 352 applies specifically to performers and provides a list of claimable expenses.
Deductions for performers
As a performer, or ‘entertainer’ (the official term used in the Income Tax Act, which applies to musicians, actors, dancers, singers and theatrical artists), you are eligible for a number of deductions under the above-mentioned section. These include:
- Deductions can be applied on agency fees and associated VAT on income earned through employment, if they are based on a percentage of the amount earned.
- These deductions can only be made if they do not comprise more than 17.5% of the total taxable earning for the fiscal year.
In this context, the term ‘agency fees’ refers to:
- Any amount paid under the terms of a contract between an employer and the employed individual who meets the two sub-requirements
- Any amount paid under the terms of a contract between a ‘co-operative society’ that is acting as an agent for the employed individual
In the legislative text, the term ‘co-operative society’ excludes any society that conducts business to profit that will be directed mainly towards the payment of any interest, loans, bonuses or dividends.
What you can claim as a performer
Additional expenses can be claimed on other expenses that you might not have expected as a performer. For example:
- Magazines and journal subscriptions from related professional societies or organisations.
- Travel to and from auditions, sets, gigs, etc. can be claimed as car mileage.
- The cleaning costs for clothing worn for the purpose of a performance (does not apply to clothing also for personal use - for example, a blazer worn both on stage and in daily life). Clothing worn for rehearsals also wouldn’t qualify.
- Tickets to shows, events, etc. can be claimed as long as they are attended for research purposes.
- Props created for performances, equipment purchased or rented, and even smartphones and computers can be considered for claims.
- Materials used for marketing such as photographs and websites.
- As well as the regular expenses that can be claimed in working from home, if applicable.
Keep these in mind for your next Self Assessment filing to ensure you claim the expenses that impact you as a performer.
Keeping track of expenses with bookkeeping software
Accounting & invoicing software like Debitoor makes it easy to keep track of your expenses and manage your cash flow, even when you’re on the way to a performance, meeting with a choreographer, or getting ready for a gig.
Staying on top of your accounts makes it easier to identify, record and claim your business expenses when it comes time for tax filing.