ticker.hart Posted October 23, 2009 Share Posted October 23, 2009 (edited) Hi, I am a good amatuer bass player and have a full time Job in the Royal Navy. I pay tax on my naval wages by PAYE (Pay as you earn). I don't earn much from playing my bass at the moment as I am only gigging about once a month and we are barely covering costs when playing pub gigs. I have started advertising myself on line for session and depping work as I consider myself to be a good bass player but due to my job I can't commit to a touring band, so session work suits me and gets me playing with some good muso's. This has already worked when i got to dep with an origional band at Guilfest this year. If the gig is apealling to me I will do it for free or for a small fee just to cover my own costs, petrol etc. My worry is that my adverts on business listings will attract the atention of the inland revenue. At the moment I am earning little or no money from my playing, but will they believe that? When you deduct the money I spend on kit, travel and rehearsal fees I am definately operating at a loss! Does anybody know where we stand legaly with this king of small cash income, of course I know that we all usually take the cash and that there is not normaly an auditable trail, but it is my adverts that i am worried about attracting attention. Any advice welcomed. Many thanks, WIll. Edited October 23, 2009 by ticker.hart Quote Link to comment Share on other sites More sharing options...
OldGit Posted October 23, 2009 Share Posted October 23, 2009 Yes. Keep records of everything you earn and spend on band related stuff. There's a long list of what you can claim from food, dry cleaning, travel, gear, maintenance, writing off capital value (that's your gear), phone calls , internet, computers if you use one to take bookings etc etc etc You'll not pay much. Quote Link to comment Share on other sites More sharing options...
Zombywoof Posted October 23, 2009 Share Posted October 23, 2009 sod that! deny everything. Quote Link to comment Share on other sites More sharing options...
teej Posted October 23, 2009 Share Posted October 23, 2009 Contact them now for a chat and some advise. Despite appearances to the contrary they're only human, and are totally willing to help, in my limited experience. Quote Link to comment Share on other sites More sharing options...
Zombywoof Posted October 23, 2009 Share Posted October 23, 2009 Hang on, you could be a tax inspector on the sly! Disregard my frivolous post. Declare everything! Quote Link to comment Share on other sites More sharing options...
OldGit Posted October 23, 2009 Share Posted October 23, 2009 [quote name='ticker.hart' post='634432' date='Oct 23 2009, 01:48 PM']Does anybody know where we stand legaly with this king of small cash income, of course I know that we all usually take the cash and that there is not normaly an auditable trail, but it is my adverts that i am worried about attracting attention.[/quote] You earn it, you pay tax on it. Simples .... This is one that comes around quite often so a search using "thread title" in "advanced search" will bring up some reading material for you but here's a recent 4 pager [url="http://basschat.co.uk/index.php?showtopic=54469&hl=tax"]http://basschat.co.uk/index.php?showtopic=54469&hl=tax[/url] Quote Link to comment Share on other sites More sharing options...
Master blaster Posted October 23, 2009 Share Posted October 23, 2009 i got a friend whos started his own business, its not as a musician tho. he also works full time as a barman. he told me that because his business isnt guna make him lots of money he will be able to claim most of his tax back from his full time job. which is the main reason why hes set up. so maybe if this is right and your not looking to earn a huge amount of money u should tell the revenue as maybe it may benifit u. Quote Link to comment Share on other sites More sharing options...
ticker.hart Posted October 23, 2009 Author Share Posted October 23, 2009 [quote name='OldGit' post='634433' date='Oct 23 2009, 01:52 PM']Yes. Keep records of everything you earn and spend on band related stuff. There's a long list of what you can claim from food, dry cleaning, travel, gear, maintenance, writing off capital value (that's your gear), phone calls , internet, computers if you use one to take bookings etc etc etc You'll not pay much.[/quote] How would I do that without having to do all my own tax returns. At the moment I don't do any paperwork for my tax as it is all done by the Navy. If I started claiming my musical earnings and expenses would i have to stop doing PAYE on my normal wages? More importantly, if I was spending more than I was earning as a musician, could I claim it against my overall income, ie pay less tax on my naval wage?!!!!! Quote Link to comment Share on other sites More sharing options...
jonny-lad Posted October 23, 2009 Share Posted October 23, 2009 You'd still pay your tax through the navy via PAYE, and then you'd fill in a tax return just for your earnings as a musician. IME, the inland revenue are really helpful if you get in touch about it, they'll really help with what expenses you can write off against your income as a musician and if you're not taking much of a fee, you'll probably end up not paying much at all. For such a small business, tax returns aren't as difficult as people may think - you'll probably get a full one in the first year (which is a bit long-winded), but after that you'll get a short tax return, which is simple to fill in if you keep records properly. Not sure about paying less tax on your navy wage, but the inland revenue will be able to advise on this. Quote Link to comment Share on other sites More sharing options...
david_l_perry Posted October 23, 2009 Share Posted October 23, 2009 (edited) I put a thread on this over on finnbass that is worth checking out for those of you not aware of declaring your tax.... [url="http://www.finnbass.com/showthread.php?t=3770"]Declare your tax ![/url] I have declared my income from playing live for the past...well probably 12 years or so...perhaps longer Over that time I have only played small time weekend gigs, typical pub club gigs, at most 2 gigs weekend, perhaps getting £40-70 per gig, but more like once per weekend at £50 per gig Every single year I have had a tax rebate..... [b]Put simply...every year I have been sent a cheque from the tax office...[/b] If you like buying gear....you will most certainly be in for a tax rebate.... Typically your income from playing is way, way less then your outgoing payments.... Dave Edited October 23, 2009 by david_l_perry Quote Link to comment Share on other sites More sharing options...
Musky Posted October 23, 2009 Share Posted October 23, 2009 (edited) [quote name='ticker.hart' post='634452' date='Oct 23 2009, 02:11 PM']How would I do that without having to do all my own tax returns. At the moment I don't do any paperwork for my tax as it is all done by the Navy. If I started claiming my musical earnings and expenses would i have to stop doing PAYE on my normal wages? More importantly, if I was spending more than I was earning as a musician, could I claim it against my overall income, ie pay less tax on my naval wage?!!!!![/quote] You don't have to stop paying PAYE, just declare your additional income. Of course if you're not getting that much from playing you may well find that all your additional expenses that you can claim for come to more than your actual income. In which case the tax man would owe you money. They're unlikely to wear that for too long before deciding your bass playing is just a hobby though. Edit: Beaten to it by... everyone! Edited October 23, 2009 by Musky Quote Link to comment Share on other sites More sharing options...
david_l_perry Posted October 23, 2009 Share Posted October 23, 2009 [quote name='Musky' post='634473' date='Oct 23 2009, 02:30 PM']They're unlikely to wear that for too long before deciding your bass playing is just a hobby though. Edit: Beaten to it by... everyone![/quote] This did happen to a pal of mine, but not me as yet. How long is too long......after 12+ years I would have thought they would have gotten the message thats its a constant loss maker for me...... Until they tell me otherwise I will happily pay my accountant to sort out my tax rebate.... Quote Link to comment Share on other sites More sharing options...
Bilbo Posted October 23, 2009 Share Posted October 23, 2009 You can do a self assessment on additional income under £15K. Its relatively easy (takes me an hour ot two a year). The claim form comes with instructions and you really only need 4 figures: those that appear on your P60 every year, your gross income, your expenditure/overheads and your capital allowances. I have declared for years: its not worth me losing my day job for not declaring income when, after declaring it, I don't pay any or very minimal tax. That tax can also be collected through your tax code so its a breeze. But I have had more rebates that tax bills. I don't know how the services work but how would a conviction for tax evasion effect your prospects? Quote Link to comment Share on other sites More sharing options...
TimR Posted October 23, 2009 Share Posted October 23, 2009 It is my understanding that to show a loss and reclaim Tax against your day job (ie what you paid via PAYE), you have to demonstarate that you have actually tried to make a profit from your music otherwise the IR will just treat it as a hobby. When people say all reciepts, I am assuming this would include, everything you paid for your gear (I think you get an allowance on capitol of 40% in the first year and 25% in subsequent years), strings, batteries, and anything you get paid from pubs, studios etc., anything you pay out for rehearsal space, I'm not sure about computers but if you use one I think you can claim something on them, milegae for car or other travel receipts, lessons given or received. There used to be something strange about working from home where you could claim heating and electricity for one room (office) but when you sell your house you had to pay capitol gains on that room, I don't really know that may have been old wives tales. Pretty soon you will either show a huge loss every year, or a very small profit not worth paying tax on. Chat with your Citizens Advice Bureau its free. Quote Link to comment Share on other sites More sharing options...
OldGit Posted October 23, 2009 Share Posted October 23, 2009 [quote name='ticker.hart' post='634452' date='Oct 23 2009, 02:11 PM']How would I do that without having to do all my own tax returns. At the moment I don't do any paperwork for my tax as it is all done by the Navy. If I started claiming my musical earnings and expenses would i have to stop doing PAYE on my normal wages? More importantly, if I was spending more than I was earning as a musician, could I claim it against my overall income, ie pay less tax on my naval wage?!!!!![/quote] YOu register as a self emplyed person as well as your day job. Check the navy don't mind 'cos some employers do. And I'd not try that cross tax stuff.... Quote Link to comment Share on other sites More sharing options...
david_l_perry Posted October 23, 2009 Share Posted October 23, 2009 I would suggest getting yourself an accountant, they know all of the pitfalls and things you can / cant claim for. The one I used cost very little, in relation to the time saved for me, and gains returned by Mr Tax man. The other big factor for me is that I imagine the tax office is less likely to scrutinise tax returns from an accountant rather than a sole trader who does his own. I am now fully self employed running my own business from a purpose home office and time is very much money.... Quote Link to comment Share on other sites More sharing options...
Low End Bee Posted October 23, 2009 Share Posted October 23, 2009 Could you get a landlord (who pays you cash in hand out of the till) into trouble if you declare income from him? Quote Link to comment Share on other sites More sharing options...
crez5150 Posted October 23, 2009 Share Posted October 23, 2009 Get an accountant.... Mine costs about £200 per year to sort out all my earnings via the band..... Worth every penny.... Quote Link to comment Share on other sites More sharing options...
sdgrsr400 Posted October 24, 2009 Share Posted October 24, 2009 One of the more interesting hypothetical situations is where in a band getting established say two members declare all band-related income and expenditure and two declare nothing. If the numbers are pretty small, the IR probably aren't going to be interested but if it became profitable then I'm sure they would be, and could possibly use the evidence of the former against the latter. Also if anyone is claiming DSS benefits then income definitely has to be declared. Quote Link to comment Share on other sites More sharing options...
lemmywinks Posted October 24, 2009 Share Posted October 24, 2009 [quote name='david_l_perry' post='634469' date='Oct 23 2009, 02:26 PM']If you like buying gear....you will most certainly be in for a tax rebate....[/quote] Damn straight. Receipts are your friend, keep em all, from petrol to strings. Quote Link to comment Share on other sites More sharing options...
david_l_perry Posted October 24, 2009 Share Posted October 24, 2009 [quote name='sdgrsr400' post='635033' date='Oct 24 2009, 01:15 AM']One of the more interesting hypothetical situations is where in a band getting established say two members declare all band-related income and expenditure and two declare nothing.[/quote] That is exactly the situation I have been in for years. I operate as a 'sole trader' ie a solo musician. Its not for me to declare or know what other guys are doing regarding tax. I just declare what my income is and outgoings are. That way I am covered for any band/PA hire that have been involved with. And remember, the less gigs you do the less your income is, but most people still probably spend the same amount of funds on gear..... I always do suggest to people in bands about declaring the income, for no other reason than its generally financially better to do so Most people just don't get it, assume it will effect any other sources of financial aid (ie family credit) but for the average weekend playing band member who likes to buy the odd amp / bass strings etc....you will probably be making a loss so it does not effect these other items. If you are making big bucks gigging then obviously you wont be making a loss, but then you will still benefit by reducing your tax that you have to pay I would suggest you start making a list of all of your purchases, CD's Music DVD, hifi equipment, itunes purchases let alone bass amps, cabs, leads strings, basses, lessons, mic's PA leads, lighting, blah blah etc... Then work out your mileage to each and every gig, rehearsal, venue, even dropping off posters or even just a road trip to check out venues - its all part of being in a band, and if the tax want you to declare the income, its only fair that you also declare all of the outgoings. Mileage is £0.40/mile upto 10Kmiles And then make a list of your total gig income, you will probably be amazed at the difference When you get your first tax rebate...you will suddenly 'get it' Mine was for around £700. The least I have had was for around £400 Accountant cost around £180-200 Loads of things you can also claim for MY accountant has a basic allowance for band meetings per week (we meet round my house to discuss songs, try stuff out with the guitarist) and I obviously supply a brew, perhaps a beer, maybe a packet of crisps........ Its all stuff that you are legitimately allowed to declare as its part of the process of trying to earn money by being in a band. Quote Link to comment Share on other sites More sharing options...
WalMan Posted October 24, 2009 Share Posted October 24, 2009 (edited) [quote name='teej' post='634441' date='Oct 23 2009, 02:01 PM']Contact them now for a chat and some advise. Despite appearances to the contrary they're only human, and are totally willing to help, in my limited experience. [/quote] I would only say DON'T because HMRC nowadays (particularly on the helplines) are quite often next to useless when you come to talk of anything the slightest bit of the script they are reading. Which isn't I hasten to add saying ignore it, but talk to an accountant, particularly one who deals with musicians regularly and may know a few more wrinkles than your average high street accountant, but even they should point you in the right direction - and will often offer a first hour for free. Otherwise as already said there are a lot of things you can claim and you will probably find that if it is running in a very small way when you tot it up they [i]could[/i] owe you. Get a cash book and write everything down that you earn, and that you spend that is related to your profession. For a use of home allowance (for practising and the like) you can claim as a minimum around £4/week. I really should get my act together and try to knock up a Wiki entry!! Edited October 24, 2009 by WalMan Quote Link to comment Share on other sites More sharing options...
Sean Posted October 25, 2009 Share Posted October 25, 2009 How do you show what you've spent on purchases from fellow Basschatters? Loads of us spend huge sums without any paperwork changing hands. It's quite a concern of mine. Shoule we be asking fellow Basschatters for receipts? Sean. Quote Link to comment Share on other sites More sharing options...
warwickhunt Posted October 25, 2009 Share Posted October 25, 2009 Hmmm if you declare earnings to the tax man etc does that then affect things like car/house insurance etc? Quote Link to comment Share on other sites More sharing options...
david_l_perry Posted October 25, 2009 Share Posted October 25, 2009 [quote name='Sean' post='636086' date='Oct 25 2009, 01:13 PM']How do you show what you've spent on purchases from fellow Basschatters? Should we be asking fellow Basschatters for receipts? Sean.[/quote] If you declare your tax then yes, get a receipt of sale. This could just be a printed email confirming the funds have been transferred via paypal for example. Its just about a paper trail to back up what you are claiming for. Obviously you also should declare your sales as well as purchases.... Quote Link to comment Share on other sites More sharing options...
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