If you’re making money from your music in the UK then it’s time to start paying taxes, but you can deduct necessary costs to lighten the blow.
Making money from your music is a wonderful feeling! But it does also mean that you need to pay tax on your new source of income. So here’s a quick guide for musicians in the UK as to what you need to pay tax on and what you can deduct your payments from.
What do you have to pay tax on?
- Streaming revenue and digital sales
- Physical sales of music
- Earnings from live shows
- Money earned by busking
- Merchandise sales
- Tips and bonuses from venues
What can you deduct tax from?
- Production equipment
- Gigging equipment
- Instrument repairs
- Instrument insurance
- Travel expenses
- Marketing costs
- Recording costs
- Commissions to agents for gigs
- Music assets like sheet music and backing tracks
You should still ensure you understand exactly what you can and can’t deduct payments from in this list. It won’t necessarily be as simple as taking money out of your petrol costs.
Eligible tax reductions will be added to your untaxed income. So if you spend £800 on instruments and gigging equipment and have £12,500 tax-free income (this is the standard personal allowance in the UK as of publishing) then you’ll have £13,300 of tax-free income. You will not be sent money by the government.
Travel costs also don’t include claims for expensive travel like first-class tickets or limos. Similarly, for accommodation when on the road you won’t be able to book in to the most premium hotels and claim deductions for it – these deductions are for reasonable expenses.
For more information on paying taxes on your music and making sure you are claiming the correct deductions you can visit www.gov.uk.