Tax on a 'cash in hand' job

PlutoinCapricorn

A few more points:

if you did decide to take the money, spend it and hope for the best and HMRC did find out, you might have to pay interest and a penalty on top of the tax owed.

If you declared the extra income, as you have a main job you would probably be given the option of having the tax collected via your PAYE tax code.

If you did register as a sole trader in the hope of building up a second income stream, this might be a point in your favour if potential clients are worried about being investigated by HMRC.

mark55man

I agree take the money now, pay off the cards and whatever but next year (ie by Jan 2011) you should do a self assessment tax return and inlcude the money in it. if your normal job is correctly assessed for tax then you will show an excess of £x,xxx you got paid and will have to be your top rate of tax on that (eg 20% or 40% ).

If you think you will have trouble saving up for that and paying next year then I would pay 80% of your money earned and put 20% into a savings account.

One further suggestion I think !! - if you do your tax by 30 Sep you can elect to have any excess tax owed paid off via your PAYE, in effect over the tax yea Apr 2011 to Mar 2012. Again this would mean you would less well off then - but you may be happy.

Finally - remember you may be able to claim some expenses back - if as it seems you are a musician you know more about them than I do, but may be worth checking with your mates what is allowable.

Torby

think you need to ask the band what they do:

e.g. do they declare their income, do they run as a business?
if they pay you "cash in hand"; if they are declaring their income, how will they account for what they pay you?

How do the venues pay the band, they also have obligations to HMRC


and here's the rub, if it goes "belly up", you didn't just get the gig cos someone loaned you a guitar/keyboard/mic, the tax man may want to know what other bands you've played in over the years. Its not unheard of for musicians to get hit with a massive tax bill a few years down the line after an old drummer was "snared" (bit of a musical pun that one....lol)...just ask yourself...who have I played with over the years...and who have they played with...you'll soon see how wide the net can be....

personally, I think the best option is go for the "one off" and pay tax on the stand in gigs you're doing...but what I hear you ask if the band isn't declaring....

see my first point....lol

fengirl_2

First of all, it is not the policy of this forum to advise people to evade tax.
As this is a one off gig, you simply need to ask HMRC at the end of the tax year (next April) for a self assessment. Declare the income as a one-off fee under the 'any other untaxed income' section. There is no reason to implicate your fellow band members as you wont be mentioning a band name or anything. The tax will be payable by 31 Jan 2011.

03022242

C_Mababejive wrote: »

Put the money in your pocket and just thiking of the banking crisis and big city bonuses. A few extra quid for you and your family at Christmas is more important than funding gthe scoundrels at the treasury.

exactly...thats what i would do..

and HMRC should be doing better things with their time like chase people who deal in alot more £££!

Credit_Jake

dave4545454 wrote: »

a lot of semi pro bands that play local pubs n clubs don't pay any tax on money they earn for it as it's cash in hand.


but if you do want to be legit and pay tax on the money you earn, don't forget that you can claim a lot of back for expenses like money for car petrol to get to gigs and music equipment such as new strings and instruments.

Can you claim back ecpenses for any second job? Im paying 20% tax on my second job. Cheers. Sorry to hijack the thread lol.

dave4545454

Credit_Jake wrote: »

Can you claim back ecpenses for any second job? Im paying 20% tax on my second job. Cheers. Sorry to hijack the thread lol.

i would have thought so. i don't think it makes any difference how many jobs you have. say if you got paid £100 for a gig but it's cost you £20 in petrol to get you there and back and you've spent another £12 restringing your guitars for the gig then i don't see why you should pay tax on the £100 you earnt when you already lost £32 of that money to do the gig. as i understand it, tax is paid on profit after expenses and overheads have been taken out. and you should keep receipts for strings and other musical equipment you buy if you're going legit and gonna pay tax.


not that i know of any local musicians who pay any tax on their musical earnings when it's cash in hand.
it's usually just the big mega star musicians who are paying tax and even them try to avoid that too like U2

Credit_Jake

dave4545454 wrote: »

i would have thought so. i don't think it makes any difference how many jobs you have. say if you got paid £100 for a gig but it's cost you £20 in petrol to get you there and back and you've spent another £12 restringing your guitars for the gig then i don't see why you should pay tax on the £100 you earnt when you already lost £32 of that money to do the gig. as i understand it, tax is paid on profit after expenses and overheads have been taken out. and you should keep receipts for strings and other musical equipment you buy if you're going legit and gonna pay tax.


not that i know of any local musicians who pay any tax on their musical earnings when it's cash in hand.
it's usually just the big mega star musicians who are paying tax and even them try to avoid that too like U2

My second job is in shop but I drive to get to it. How do you go about claiming back these expenses then? Surely that would apply to my full time job as well which I drive 30 miles a day to. Thanks.

dave4545454

Credit_Jake wrote: »

My second job is in shop but I drive to get to it. How do you go about claiming back these expenses then? Surely that would apply to my full time job as well which I drive 30 miles a day to. Thanks.

sorry i don't know the answer to that. i'm sure others will be able to help you when they read it.


but if i was to take a guess....claiming expenses off your total earnings would only apply to if you're self employed and not working for someone else. and in the case of this thread, the musician would be classed as self employed. but in your case, i take it that you're working for someone else.

i'm only guessing there so don't quote me on that!

Gar_2

fengirl wrote: »

First of all, it is not the policy of this forum to advise people to evade tax.
As this is a one off gig, you simply need to ask HMRC at the end of the tax year (next April) for a self assessment. Declare the income as a one-off fee under the 'any other untaxed income' section. There is no reason to implicate your fellow band members as you wont be mentioning a band name or anything. The tax will be payable by 31 Jan 2011.

i'm not suggestion tax evasion, i know there is a correct way to do things and i know people who have been stung for this, and i can do without it in all honesty.

i know i need to buy some buy some replacement and spares which will cost a few hundred pounds so will keep receipt and details of fee's and venues etc. d as stated, clear what i owe outstanding and come next year submit a self assesment form.

thanks again for all your help