22nd August 2016
Self-employed musicians often incur considerable expenses doing their job. Fortunately many of these costs can be deducted. Knowing what can (and can't) be claimed will help you reduce your tax bill.
In general relief can only be claimed on things which are used solely for work and not in your private life.
One of the primary costs incurred by musicians is on cars or vans and petrol. Motoring expenses include fuel, maintenance costs, insurance, vehicle recovery subscriptions, interest on loans, garage rental and mileage. Capital allowances on vehicle depreciation may also be claimed in certain circumstances.
The expenses can only be claimed on journeys used for work and it is recommended you keep a record of all work journeys.
However, recording all motoring expenses can be time consuming, so HMRC accepts flat rates for mileage. The current rates are:
- cars and vans for the first 10,000 business miles 45p per mile. Every mile over 10,000 is 25p per mile
- motorcycles 24p per mile.
- bicycles 20p per mile.
If you chose to use this scheme you cannot claim other vehicle expenses or capital allowances.
It is not possible to switch between the 2 methods of recording and claiming motoring expenses.
If a musician or band has a studio or other space that they regularly use for rehearsals or teaching, then this is likely to be deemed their usual place of work. Travel expenses between home and this venue would not be allowable. Similarly, if they regularly play gigs in a particular venue on a long term basis (for example they play every Friday night in a particular pub), then the cost of travel to this place would not be allowable.
If however they have no regular base for rehearsals and gigs are generally on a one-off basis, then they can argue that they are based at home and travel expenses to rehearsals/gigs are allowable. For semi regular rehearsals or short term contracts it would be necessary to look at this on a case by case basis.
100% of the cost of stage clothes and cleaning thereof can be claimed by musicians. The cost of ordinary clothes and footwear is not generally allowable. This can be a difficult expense to justify to HMRC as many stage clothes can also be worn in everyday life.
Instruments and music
Any large purchases of instruments come under capital expenses, whereas smaller purchases, insurance and repairs are regular expenses. Manuscripts, arrangements and sheet music are claimable.
Other possible expenses include:
- room and equipment hire
- advertising and publicity costs
- fees such as those to managers and bank charges
- research, including CD’s and attending performances by other musicians
Paying wages or using your home as an office are a little more complicated. We can advise on how these expenses work.
How to claim
Keeping and maintaining accurate records and receipts is essential when claiming against tax. The procedure is straightforward but can be time consuming and it is sensible to consult an expert to ensure that all legitimate expenses are claimed and the documents and forms are correctly completed before submission to HMRC.
For more information contact us on 0207 734 2244