The excerpt below was the lament of the Kinks in the 1966 hit, ‘Sunny Afternoon’. But don’t let it happen to you!
“The taxman’s taken all my dough…”
A quick guide to expenses for musicians
The excerpt above was the lament of the Kinks in the 1966 hit, ‘Sunny Afternoon’. But don’t let it happen to you! If you’re a self-employed musician, whether you’re a solo artist or part of a band, there are numerous expenses that you can claim against tax. Here’s a quick overview of what you can claim for – and a few things you can’t!
What expenses can a musician claim?
Most tax-deductible expenses fall into one of the following five areas:
These are the main background costs that musicians face. A key item here could be the fees charged by your manager or agent or the fees you pay to other musicians. And if you have to employ someone to help you with your work, their salary and the National Insurance contribution you make are tax-deductible. Other costs you can claim for include most of your accountant’s fees and any bank charges. And if you work from home (e.g. on administration or rehearsals), some expenses are allowable (The Showbiz Accountant can help you to calculate these).
As a musician, you’ll want to promote your skills in some way – and hosting and maintaining your business website is an allowable expense, as are relevant marketing costs, such as flyers, posters, adverts and promotional photos.
Your instruments are a tax-deductible expense, as are any repairs you need to make to them and the cost of insuring them. Other allowable expenses include production and gig equipment; sound and lighting systems; and computer equipment.
You can usually claim for the costs of preparing for an event or going to meetings etc. Typical costs might include travel and accommodation; subscriptions to journals and trade bodies; tickets to relevant events; sheet music and other music (including downloads); and training and workshops
Finally, you can claim for expenses related to the actual performance. These might include the cost of premises; recording fees; and clothing bought specifically for when you are performing.
Allowable expenses are usually those that are incurred solely in the pursuit of your business – although a percentage might be allowable if used partly for work. Many expenses aren’t tax-deductible, however.
For instance, legal fees can’t usually be claimed against tax. Motoring expenses are only allowed when the travel is purely for business purposes. The cost of your meals isn’t usually allowable, as these could be classed as necessary for both work and leisure. However, reasonable costs of food and drink when going to a performance or on a tour can be tax-deductible. But you can’t claim for the cost of a meal you might buy for your agent or a prospective client.
“I love to live so pleasantly…”
Claiming expenses is a minefield. If you’d like help in finding your way through it, call The Showbiz Accountant (0203 3842224 in the UK or +1 424 228 9700 in the US) and we’ll guide you through it all. Then you can relax, having the peace of mind that you’ll receive as much as possible from what you’ve earnt, without the taxman taking all your dough…