Self employment in the entertainment industry

redsclubbedup

Hey,

Im going to be self employed as of mid July and am aware that I will be required to maintain records of my earnings etc....

I will be working as a DJ and am aware that I am entitled to 40p travelling costs (up to 10,000).

I am also able to claim VAT back on petrol, equipment I use, clothing (as its important to my job to be well dressed) and other such expenses ? Also the insurance I pay on my car, can I claim insurance tax back etc... as I am using it for work purposes

Often I am given expenses for petrol / hotels etc... are these expenses taxable too ?

I am starting to look into all of this, but am keen to get the ball rolling hence all the question

thanks

Bean_Counter

redsclubbedup wrote: »

Hey,

Im going to be self employed as of mid July and am aware that I will be required to maintain records of my earnings etc....

I will be working as a DJ and am aware that I am entitled to 40p travelling costs (up to 10,000).

I am also able to claim VAT back on petrol, equipment I use, clothing (as its important to my job to be well dressed) and other such expenses ? Also the insurance I pay on my car, can I claim insurance tax back etc... as I am using it for work purposes

Often I am given expenses for petrol / hotels etc... are these expenses taxable too ?

I am starting to look into all of this, but am keen to get the ball rolling hence all the question

thanks

Are you VAT registered?

dejongj

redsclubbedup wrote: »

Hey,

Im going to be self employed as of mid July and am aware that I will be required to maintain records of my earnings etc....

I will be working as a DJ and am aware that I am entitled to 40p travelling costs (up to 10,000).

I am also able to claim VAT back on petrol, equipment I use, clothing (as its important to my job to be well dressed) and other such expenses ? Also the insurance I pay on my car, can I claim insurance tax back etc... as I am using it for work purposes

Often I am given expenses for petrol / hotels etc... are these expenses taxable too ?

I am starting to look into all of this, but am keen to get the ball rolling hence all the question

thanks

LOL Clothing because you need to be well dressed? Yeah right, don't we all...You'd be so lucky....

If 'given' expenses relate to real expenses incurred they'd still be 'taxable' income but should be offset by the expense incurred...If they weren't really incurred or you can't prove it, it is just income....

nealnomoney

You cant claim 'VAT' back if you are not registered

erique7

dejongj wrote: »

LOL Clothing because you need to be well dressed? Yeah right, don't we all...You'd be so lucky....

QUOTE]

Hey!

I was a model for 8 years and I (through my accountant) claimed tax relief on clothing expenses, make-up, hairdressing the lot! Obviously you cant claim the full amount but you can claim a percentage.

Emma

monkeymax

redsclubbedup wrote: »

Hey,

Im going to be self employed as of mid July and am aware that I will be required to maintain records of my earnings etc....

I will be working as a DJ and am aware that I am entitled to 40p travelling costs (up to 10,000).

I am also able to claim VAT back on petrol, equipment I use, clothing (as its important to my job to be well dressed) and other such expenses ? Also the insurance I pay on my car, can I claim insurance tax back etc... as I am using it for work purposes

Often I am given expenses for petrol / hotels etc... are these expenses taxable too ?

I am starting to look into all of this, but am keen to get the ball rolling hence all the question

thanks

You are only able to claim travelling costs travelling from your office/place of work to another job not back and fore to work otherwise we'd all claim expences going to work. To get around this use part of your home as an office this gives you a point of work then when you leave to do a gig you will be travelling from work to another job. You can claim 40p per mile for the first 10,000 and 25 pence thereafter. Clothes are not an integral part of your job, unless they carry a logo or are specifically only used in your job then you cannot claim for these (we all need to look good). If you claim mileage you cannot claim additional petrol costs as this is taken into account in the 40p. Hotels can be claimed for if a necessity. You will need to be VAT registered to claim back VAT, however there is a turnover threshold you have to pass first of £64,000 in the current year. If you do decide to use part of your house as an office this brings more expenses you can claim. Did you know you can claim a percentage of your household utility bills? it is worked out on the calculation of rooms in your house minus bathrooms. So a two bedroom house with a front room and kitchen will mean you can claim a quarter of all utility bills you use in your offie (i.e. elec, gas, broadband, phone)

dejongj

erique7 wrote: »

dejongj wrote: »

LOL Clothing because you need to be well dressed? Yeah right, don't we all...You'd be so lucky....

QUOTE]

Hey!

I was a model for 8 years and I (through my accountant) claimed tax relief on clothing expenses, make-up, hairdressing the lot! Obviously you cant claim the full amount but you can claim a percentage.

Emma

Lucky you, as long as you don't overdo it mostly doesn't get investigated. But I would love to see where those allowances are documented. The general rule is one of duality, i.e. business expenses are those incurred that you really would not have if you weren't working...Everybody needs clothing, but not necessarily protective clothing....

Fair enough if you were a model in certain speciality areas, but generally where I've got the experience with the clothing is provided, as is make-up etc. Making yourself representable for an interview is not unique to your job...But hey if you get away with it great!

Some peopel know of image consulting services and you get a free tailor made suite at the end

insured

If you look at https://www.hmrc.gov.uk/manuals/bimanual/BIM50160 it explains the position exactly for entertainers.
You can almost certainly claim for the smart clothes you need for your DJing work.
I would suggest you approach an accountant who will be aware of these regulations, and the other issues which you mention.
If you have been making a loss over the last few years, you will be able to offset your loss against current other income, or carry it forward.
Also, losses in the first four years of trading can be carred back to the previous three tax years of other income.

monkeymax

jimmo wrote: »

What a lot of information / opinion has been posted here but not a single response from redsclubbedup in five days. Are you still there?

Everybody, please remember that I am a former Tax Inspector and my aim is not so much to criticise but to point out the potential difficulties you may face if you present your story unprepared.

Bean Counter asked if redsclubbedup is registered for VAT. No response but I rather imagine that the answer is No because redsclubbedup said “I am going to be self employed” and has not yet registered.

However whether redsclubbedup is intending to register for VAT is vital to so many of the points arising from the original question.

Redsclubbedup has also said that “Often I am given expenses for petrol / hotels etc.”

How come, if he has not already started trading? Being a DJ often starts out as a loss making hobby but if he has been successful enough to merit travelling and hotel expenses as well as fees does that really make sense or has he realised that he is making so much money that he now needs to go legit? If so he could face tax arrears with interest and penalties

Redsclubbedup could also have been making losses for a number of years and those losses could be set against current or future profits.

Redsclubbedup you almost certainly need an accountant yesterday.

Travelling Expenses

The 40ppm/ 25ppm relief system is available generally but it is not available to those registered for VAT. If you can reclaim the VAT on petrol your motoring costs are significantly lower than those of us who can’t. You will have to make fully detailed claims.

You are likely to be able to claim business mileage from your home to the venues you work at. The taxman recognises that you must have a base of business and unless you have some other premises elsewhere your home will be it.

Use of Home

If you use one room in your house exclusively for business purposes then you can claim a proportion of your household expenditure. Be realistic. If you live in a two up, two down don’t expect the taxman to believe that your family spends the whole of it waking hours in the kitchen/diner and the lounge is set aside exclusively for your business. If you live in a 4 bedroom property it is feasible to set aside one of the bedrooms for business purposes.

CLOTHING

Forget about logos. They do have relevance for employees but you are self employed. If you feel the need to be well dressed, tough, no tax relief. If you feel the need to be specially dressed you may have some hope. Not quite the DJ scene I know but musicians in orchestras and waiters in high class restaurants who have to be dressed in formal evening wear will get tax relief because the clothes they wear are special. If it’s everyday wear but smart it’s not good enough.

The most significant recent Tax case that went through the courts is Mallalieu vs. Drummond. Anne Mallalieu is a Labour peer and was (and probably still is a practising barrister). She claimed that the rules of court were that she was required to appear in court dressed in black and white. But the House of Lords ruled that, the black skirts and white blouses she wore were not special enough to justify special treatment.

They were everyday clothes and no tax relief was due.

If you perform in a funky chicken outfit you can claim. If you work in smart clothes you probably can’t.

Thats basically what i said a few posts earlier

mrsS_2

claiming vat back on petrol is rather complicated- you end up paying vat fuel scale charges. mileage has to be significant to make it worthwhile.

I agree with Jimmo- you wont be able to claim for clothing unless it is a uniform or protective clothing.

The revenue considers clothing to be there to keep you warm and stop you being naked- the fact that it is smart is irrelevent.