Musicians and Tax

[protoolsnut]

Hi All, I thought i would start a really serious topic here.

Recently, a mate of mine was investigated by the Revenue Comissioners in relation to earnings through music.

Unfortunately for him, he failed to keep what they classified as "Reasonable reciepts and expenses" yet they would not divulge this information to him.

Myself, I pay my fair share, i think it is only reasonable and fair to pay my bit, especially in this current economic climate. however, there may be a few areas where i am failing. or some perks that i am not aware of.

Is there anyone on the forum with experience, and conduct music as a serious business??

Feedback Welcome

Paul

[frankie]

Nov 23, 2011 0:27:24 GMT protoolsnut said:

Hi All, I thought i would start a really serious topic here.

Recently, a mate of mine was investigated by the Revenue Comissioners in relation to earnings through music.

Unfortunately for him, he failed to keep what they classified as "Reasonable reciepts and expenses" yet they would not divulge this information to him.

Myself, I pay my fair share, i think it is only reasonable and fair to pay my bit, especially in this current economic climate. however, there may be a few areas where i am failing. or some perks that i am not aware of.

Is there anyone on the forum with experience, and conduct music as a serious business??

Feedback Welcome

Paul

Keep a log book for mileage ,when going to buy strings etc,setting up gear,chasing bookings etc.
Vehicle repairs.
Insurance and electricity offsets if you practise at home and store your gear there.
Anything to do with your band.Gaffer tape guitar picks equipment updates and repairs.
Sheet music and other "misc"items.CD's for learning songs from.
Dry cleaning of clothes each week.
Meals when playing out of town.You do not need reciepts for under $20 not sure what yours would be in the UK check with the small business section of the Tax Dept.
Accomodation expences if away and not paid for by the venue.
I found that if you keep a record of the above and your "gig"income
take it to a Taxation specialist and you can claim their costs back as well.

[protoolsnut]

sounds accurate enough to what i am doing ATM, I also keep a time log (leaving home - Returning) plus a loadin-loadout log as this is manual labor. It is amazing how a 2-3 hour gig can consume 9-12 hours of your life pretty quickly.

Shower & Preparation 1 Hour
Re-string (If required) 1 Hour (Allowing for intonation adjustments polish etc)
Average drive to venue 1 hour
Load-in & Setup 1 hour
Performance 2-3 hours
Tear Down & Load Out 1 Hour
Average Drive Home 1 Hour

Typical Time spent 8.5-9 hours

I normally find it easier to pay myself an hourly salary, reducing my PAYE (Pay As You Earn), Then the balance in income tax, should there be a positive balance.

Strange facts for Irish Musicians:

You can only claim 12.5% of your equipment cost in a tax year.
You can not claim Road Tolls, However if you have a E-Tag, you can claim the VAT
Mileage is calculated at the Civil servant rates and based per Kilometer.

I have seen some friends charge 200 for a gig and tally up over 230-250 in ligitimate mileage!!!!!!!!!!

[frankie]

Yeh civil service rates apply in most countries.Do you want me to email a copy of my claims breakdown.

[protoolsnut]

Yes, please do Frankie. it would be interesting to see what others are doing. and to acknowledge my strengths and weaknesses.

I have just come across a pretty website for calculating mileage called mileagesheet.ie

you can add your expenses and substinance and if you are only keeping track of yourself.. ITS FREE!!!!

Great for our Irish Muso´s

[levi2]

we just pay an accountant to do our tax as we have our own main jobs and gigging comes 2nd he does the tax for the duo also our own personal tax and we pay our tax from the duo thru our main wages so our tax code is slightly lower than the average tax code

[JohnG]

Useful discussion,

It's essentially the same as being self employed. So, car expenses, I was able to claim most of mine (tax, insurance, repairs) against the business, as my wife had her "family car". If you have a van for carrying equipment I'd guess that could be a legitimate business expense either totally or in part.

There are IR guidelines as to mileage rates. I think I used to use 40p per mile from memory.

I claimed one room as my "study" and partial costs of heating the house and electricity. You do need to set up a room as a work room so if you get inspected it looks legit. I was visited by the VAT man the year after I first registered.

My home PC was my business machine and I required a laptop in order to do presentations. Both of these were "depreciated" over 5 years, as were printer and other "office" electronics e.g fax machine. So you can reasonably write off e.g. a guitar over a longer period. The 12.5% sounds like an 8 year write off. So I'm sure you could do the same with PA, sound module and other things that are needed.

There are IR guidelines as to mileage rates and you ought to charge.

Keep a ring binder full of your receipts in chronological order and get into the habit of saving all receipts, even for 2nd hand equipment. Write it all down in a "day book" no later than the day after, or make notes in a diary. On the basis that if you've got it all, at least some of it may be reclaimable. Sensible advice from my accountant.

BTW an accountant is also a reasonable business expense.

I found out that I could also make some claims for "entertainment" i.e. buying colleagues a round of drinks. DON'T overdo this. I got into the habit of keeping all my receipts, strangely I still do, then throw them when I get home!

In my last year of trading in the UK, my expenses almost added up to more than my earnings. I travelled twice around the world lecturing! That added up to a huge amount of business class air fares. In one two week period I did London to Dubai, to Cairo, to Dubai, to Jo'berg, to Dubai then back to London. The last couple of legs Emirate airlines upgraded me to first class for free. Then I went of to Sydney, via Washington and L.A. No wonder I was constantly knackered.

Ah! The wonders of jet lag!

Anything you spend on advertising or buying MIDI tracks or "office consumables" is probably legit too.

Think creatively!

JohnG.

[Tubbs]

Tax? Whats that??

[mark]

I was self employed for 6 years and was never inspected in that time.Although now living in Canada I still have all my receipts and books.John G summed it all up.I used to do my tax return on line.It was pretty easy.

Mark

[oliver101]

I claim £4.00 per booking for drinks as the voice needs lubrication. The rest of what you have all said is much the same as mine. Dont forget dry cleaning bills to keep your stage clothes in good nick also.

Ian

[protoolsnut]

Nov 23, 2011 16:58:24 GMT oliver101 said:

Dont forget dry cleaning bills to keep your stage clothes in good nick also.

Ian

Time to buy a new Louis Cpoeland suit so!!! ;D ;D

Paul

[weegeo]

`The tax man`s taken all my dough, left me sitting on my own telling tales of drunkeness and cruelty lol lol

Simple answer get a good accountant 48 years gigging and only paid tax a few times!!! my plan was always if it doesn`t move claim for it worked ok for me lol

[frankie]

Nov 23, 2011 14:39:42 GMT Tubbs said:

Tax? Whats that??

Additional money at the end of a financial year if you do it right !!

[frankie]

Nov 23, 2011 16:58:24 GMT oliver101 said:

I claim £4.00 per booking for drinks as the voice needs lubrication. The rest of what you have all said is much the same as mine. Dont forget dry cleaning bills to keep your stage clothes in good nick also.

Ian

Dont forget to claim for your internet and cell phone.

[Tubbs]

Nov 23, 2011 20:01:25 GMT frankie said:

Nov 23, 2011 14:39:42 GMT Tubbs said:

Tax? Whats that??

Additional money at the end of a financial year if you do it right !!

You sound like an ideal accountant Frank!! ;D