People in the entertainment industry are often very creative. They don’t necessarily spend their time thinking about boring things like tax.
‘Merry Christmas Everybody!’ – or is it?
Taking the terror out of tax
People in the entertainment industry are often very creative. They don’t necessarily spend their time thinking about boring things like tax. But unfortunately, whether you’re working backstage, writing a book or being a true thespian in front of the footlights, tax is a necessary evil that you can’t avoid if you’re earning a reasonable amount of money.
Of course, your idea of ‘reasonable’ might differ from that of Her Majesty’s Revenue and Customs (HMRC). However, they lay down the rules. You must start paying tax in the UK once your earnings (minus any allowable expenses) exceed your personal allowance, which at the moment is £12,500 (or possibly more if you’re married or less if your income exceeds £100,000).
Don’t incur the wrath of the taxman!
You can pay tax through self-assessment if you’re self-employed or through Pay As You Earn (PAYE) if you have an employer, or both. If you’re self-employed, you must have registered yourself with HMRC by six months before the end of the tax year (i.e. October).
Self assessment means that you (or your accountant) will have to complete a tax return for the year ending on April 5th and submit it before 31st January of the following year. If you don’t, you’ll face an immediate penalty of £100 – and any further delays will bring further penalties.
Know what you can and can’t count as expenses
Your tax return will include your income from all sources minus expenses – and you need to know which expenses are allowable. Otherwise, you could pay more than you need to or (potentially worse, as you could face penalties) pay less than you should. According to HMRC, allowable expenses must be incurred in the performance of your business. However, there are some grey areas, so it’s often worth seeking the advice of an accountant.
In fact, a reputable firm of accountants can help you with all aspects of your return, taking away a lot of hassle. The Showbiz Accountant specialises in helping people in the entertainment and sport sectors, and we know exactly what expenses you can claim for. At the moment, we’re offering to sort out your tax return for just £300 – you can find out more detail about it here. Furthermore, this charge is an allowable expense! However, you’ll need to supply all the details before January 8th 2020 so that we can complete and submit the return in time. If you’re interested, contact us as soon as possible on 0203 3842224.
While we can do a lot to help you, there are some things you’ll need to do for yourself – such as keeping receipts for everything you’ve spent during the year and paying the tax you owe by 31st January (you can pay online, by BACS, direct debit, cheque etc.)
So, tax can be a real headache at this time of year but it doesn’t have to be. Just ensure that whatever you do, your return is completed and submitted in plenty of time. Then you can relax and, in the words of Judy Garland (or more recently, Sam Smith), ‘Have yourself a merry little Christmas’!