Tax advice for musicians

Having been freelancing for about four years now, I’m about to complete my fourth tax return. It can be daunting when you first graduate but it needn’t be scary. I thought I’d write this post and give some pointers and help.

Please do bear in mind that I am not an accountant or a financial expert, this is just coming from my own experience of doing my taxes for the past few years. There are lots of different ways to do your taxes, this is just what I do on a yearly basis.

The very first thing you need to do (if you are earning money from gigs and private teaching) is register as self-employed. This is straight forward but very important as if you don’t pay your National Insurance contributions, it might affect your state pension. So head on over to the relevant gov.uk page for registering as a sole trader and fill in the forms. Simple!

Ok, done? Now for the slightly time-consuming bit.

You need to keep a record of your business income and outgoings. I like to keep a file for each year, with a divider for each month, fees from a gig? Keep a note. Had to buy food at a gig? Keep the receipt and make a note. I also make sure to file away any contracts, pay & display tickets, restaurant receipts, invoices (sent and received) and anything I receive from HMRC in there, which makes it much easier to compile my accounts for the year.

As a very important side note – in order to complete your tax return you will need a P60 form from any employment you’ve undertaken with an organisation, do you have a part time job in a bar/shop/school? Without these, your accountant won’t be able to complete your tax return and you’re kind of stuck.

Got it? Awesome.

Let’s say you need to drive to your gigs. For each gig you do, make a note of how many miles you have travelled, maybe keep a monthly total.

For the first 10,000 miles of the year, you can charge 45p/mile as travel expenses, anything after that can be charged at 30p/mile. This theoretically covers fuel, insurance, car repairs and servicing, so the mileage should be the only car related expense in your records.

What about music, strings, concert clothes? Yep, keep the receipt in your folder and add it to your expenses when compiling your records. Concert clothes are a little tricky as they should only be for concerts, so if you intend to wear it on a normal day you shouldn’t really include it as an expense. If in doubt, keep the receipt and ask your accountant. I might ask mine about costume jewellery…

Then, at the end of the tax year I make a spreadsheet, one column for the type of expense (e.g. sheet music) then in the column next to it I’ll put the amount to the nearest pound (e.g. £15). A few columns later I’ll do a similar thing for income (e.g. Sheffield Wedding 10th October – £200). Then I’ll go chronologically down the spreadsheet in months.

Each month needs total values for Income, Expenses, PROFIT (Income minus expenses) and Total Miles Travelled.

Once you have compiled all twelve months – give yourself a big pat on the back and pour yourself a glass of something – you can work out your TOTAL Income, Expenses, Profit, Miles Travelled, and Mileage. If you have geeky tendencies like me you can also work out monthly averages by dividing the total values by 12. So you have a monthly income to aim for each month.

Press save, take to your accountant and the rest should sort itself out. You can also put accountants’ fees on your expenses and do bear in mind that many accountants offer cheaper services the earlier you see them. So a tax return in May or June might cost you £100 but leave it till January and you could be staring down the nose of around £250. Being organised pays off!

And that’s it! If there’s anything I haven’t explained very well do let me know in the comments and I’ll try and be more clear.

Also, it’s the time of year when students are graduating! Congratulations to everyone graduating from RNCM in particular – this post is written with you in mind. If you have any questions about life in the ‘big wide world’ so often talked about at college, leave me a comment and I will do my best to help.

Continue Reading

Porto!

I’m back! Freshly tanned and totally refreshed from ten days staying in Porto with some of my lovely friends. So I thought I’d post about it and let you know what we got up to (and make you just a little jealous).

As you can see from the photo at the top of this post, Porto is beautiful. Not only that, the food is amazing and the people are super friendly.

We sampled the local delicacy known as the Francesinha – basically shove as much meat as you can into a sandwich – sausages, steak etc, top with a fried egg, cover the whole thing in cheese, drown it in a sauce – the main ingredient of which is booze, then add fries.

Yea, don’t eat these every day:

DSC00327

We drank a lot of red wine, and a lot of port – it’s rude not to, right? We took a tour of the Cockburn’s port cellars and tasted some of their port afterwards.

DSC00304

DSC00306

Everything is so cheap out there. In a supermarket you can get a lovely bottle of wine for €2.50, a bottle of nice port for €8 – and a proper meal out in a restaurant can be between €5 and €10. It’s ridiculous! Apparently in England we just get ripped off when we buy anything.

We had a day trip to see a Medieval Festival, which was fabulous.

Lunch: 1 rabbit.

DSC00273

Wine: 1 Euro.

DSC00269

I got the chance to read some books that I’ve been meaning to get round to for ages.

DSC00266

I (finally) finished Stephen King’s Needful Things  – very creepy. Then I read Life of Pi which was fantastic, one of those books that you just can’t stop thinking about after finishing. I then started Solar by Ian McEwan, which is very good so far. I intend to keep reading as much as I can now that I am back. I so enjoyed not having my phone at all for those ten days, and only sporadic internet access to check for emergency emails. It meant that the group spending time together meant conversation, playing cards, cooking, and just enjoying each other’s company as you can clearly see here:

IMG_0328

We played the card version of Monopoly – Monopoly Deal – for hours and hours. It is so addictive and well worth checking out if you haven’t seen or heard of it.

DSC00293

I also finally learned how to play poker! With Monopoly money of course…

So all in all, a fantastic trip. Big thank-you to Artur Pereira for hosting us so generously – we love you! Here’s to the next time 🙂

Continue Reading