You should always approach it in a business like manner unless you are jamming down the pub for nothing. As others have said, there are things you can claim for to offset against any earnings.
Find out what you can claim for, travel, equipment and all the other costs, and then keep receipts and records. I use an old program called quicken, and it shows all my incomings and outgoings over the years.
The most important thing is for you to sit down on a regular basis and record all those incomings and outgoings. Its easy enough to drag out the receipt for your bass or amp, but you wont remember the stamps for publicity, or the hire of a rehearsal space, the batteries for your effects, BGM from Smiths unless you make a habit of regularly entering these up.
Many years ago a friend of mine was caught as a solo organ player who used to play in a pub every couple of weeks. The IR caught up with him, and assesed his earnings as huge figure. Jack didnt even know how many times he had played there over the years, and there was talk that the landlord had been entering Jacks and other peoples gigs through the books far more times than they had actually played. He had to pay a fortune in back tax.
By and large Ive always found the revenue fairly reasonable, if you approach them in a reasonable manner