Very low profit musician questions.

5stringer

Hi. After many years as an amatuer musician and a recent day job change I have landed a great part time weekend job in a tribute band. As things stand I can expect a total turnover of about £4000pa at the very most. This will be a self funding hobby and any profit left after petrol and consumables at gigs will be spent on upgrading my equipment.
I realise that I should still register as self employed even though I am not expecting a profit.
My day job is well paid and I am only just falling short of the 40% tax rate so any band profit I make will likely be taxed at 40%.
Questions I have are...
Can I just keep my own records of payments and expense wich will be very simple or do I need to employ an accountant?

Can I claim my milage at 45p per mile.

Can I claim the current value of the equipment I already own as a legitimate start up cost to offset against my first years income?

I have already spent £500 on new equipment and stage wear specificaly for this band but have thousands of pounds worth of equipment from my amature years which will be essential to my new hobby business.

If I make a loss in year 1 will I get a tax rebate on my earnings from my day job?

Will having a self employed business operating at a loss be bad for my credit rating or reflect badly on me in any way?

I knoe people will say that I should just do this as a hobby but I will be paid by bank transfer or cheque by a management company and various agencies so I want to do this by the book. Especialy as I genuinely expect no profit.

Any advice is much appreciated.

paddyrg

Congratulations! Getting employed work as a muso is a result, no matter the level :-)

You can keep your own books easily enough, keep your receipts, keep your records cleanly. At the end of the year you will need to self-assess for tax, and you're right you'll only pay tax on your profits. I can't see it having a big influence on your PAYE tax, but if you can demonstrate a legitimate loss in your trading activity then you could potentially see a refund - however HMRC might enquire if it's a real, viable business if you're losing enough money to start getting a refund.

I'd suggest you could claim the stuff you've spent on this particular venture, but you're on thin ice reclaiming for kit you bought and used as an amateur. You could look at renting it to yourself, but not without an accountant, and then you may incur the concern of HMRC.

Mistral001

The OP probably needs an accountant as perhaps some of the band equipment will not be considered as pure expenses, but capital expenditure that is spread out over a number of years. This would mean that it is likely that you would turn a profit from year one.

mehera

The Op cant afford an accountant i think!!!!!

5stringer

Thanks for the replies so far.

You are right. This certainly wont pay enough to be hiring an accountant. On average I will get paid £100 per gig. I have to travel all over the country and will be away for a whole day often so by the time fuel food and other consumables like strings and batteries are paid for it will turn very little profit. I imagine an accountant is expensive!

This is not bad money for a hobbyist muso. And to do these shows and break even or for a small profit is awesome. Just a shame it requires me to tackle the minefield of being self employed!

So far I am keeping a spreadsheet of my wages and any expenses and milage that I am doing plus keeping all my reciepts. I have not yet registered as self employed but guess I need to do it ASAP.

Wywth

mehera wrote: »

The Op cant afford an accountant i think!!!!!

The OP can't afford not to have an accountant I think!!!!!

Any half decent accountant should be able to save more than they cost.

Wywth

5stringer wrote: »

Hi. After many years as an amatuer musician and a recent day job change I have landed a great part time weekend job in a tribute band. As things stand I can expect a total turnover of about £4000pa at the very most. This will be a self funding hobby and any profit left after petrol and consumables at gigs will be spent on upgrading my equipment.
I realise that I should still register as self employed even though I am not expecting a profit.
My day job is well paid and I am only just falling short of the 40% tax rate so any band profit I make will likely be taxed at 40%.
Questions I have are...
Can I just keep my own records of payments and expense wich will be very simple or do I need to employ an accountant?

Can I claim my milage at 45p per mile.

Can I claim the current value of the equipment I already own as a legitimate start up cost to offset against my first years income?

I have already spent £500 on new equipment and stage wear specificaly for this band but have thousands of pounds worth of equipment from my amature years which will be essential to my new hobby business.

If I make a loss in year 1 will I get a tax rebate on my earnings from my day job?

Will having a self employed business operating at a loss be bad for my credit rating or reflect badly on me in any way?

I knoe people will say that I should just do this as a hobby but I will be paid by bank transfer or cheque by a management company and various agencies so I want to do this by the book. Especialy as I genuinely expect no profit.

Any advice is much appreciated.

Sounds like a hobby then.

If you really want to go into business, I suggest you start one that at least aims to deliver a profit