Paying tax on income for gigs?

informalcranberry12 · 28 January at 6:48PM

Myself and three friends are in a band, weve been going about 3 years and are now at a stage were making a bit of money off our ticketed shows. (max £350 each per show. max 2 shows a month)

We're worried dually about where the money can go (posted a separate thread) as at present we take it in turns to take the payment from Skiddle/the venue and then divide up between the 4 of us.

I'm considering what we can do for this year before we have any shows about if we'll go over our tax free limits each. We're all employed PAYE employees, and all earn sub £40k if thats of any use. Ay advice on whether we need to or should set the band up as a sole trader in one of our names, a Ltd company or anything similar? Thanks :)

mybestattempt · 28 January at 8:46PM

https://forums.moneysavingexpert.com/discussion/6652632/paying-tax-on-income-for-gigs

I've also commented on your post in the banking and budgeting board.

It seems to me at the moment the band is a four person partnership as you and your band mates are "carrying on a business in common with a view of profit".

This guidance explains how to register a partnership with HMRC:

https://www.gov.uk/set-up-business-partnership

Grumpy_chap · 28 January at 9:49PM

If I understand the OP correctly, each individual can make £350 once or twice a month. Let's assume 18 events per month. That means £6.3k each per year which will be subject to income tax. How have the band been manging taxation up until this point?

Is the £350 each per gig the gross amount, or the amount left after any allowable expenses?

To which "tax free limits" does the OP refer? Given each individual is in PAYE employment in addition to the band so that PAYE employment will utilise the personal allowance available to each individual.

Isthisforreal99 · 28 January at 10:27PM

Given the apparent lack of knowledge my advice would be speak to an accountant.

informalcranberry12 · 28 January at 11:06PM

https://forums.moneysavingexpert.com/discussion/comment/81859104#Comment_81859104

This is the first year we will exceed £1k profits each due to the number of booking we currently have after April. Assuming we sell 75% of the venue at a 70/30 split less hire and promotor fees we'll be over our £1k "hobby" limit each.

I do keep a record/reciepts of all my expenses (fuel, hotels, string, food) but some of the members don't or can't, which is what's caused as issue upto now though pretty sure we were under this tax year.

informalcranberry12 · 28 January at 11:08PM

I think I may have to but we all need to be in agreement. Lol musicians are like herding cats. I am leaning towards being 4 sole traders and letting the promotor hand the funds out individually to us then I am not tied to managing or being financially connected to the others. We've got no contract in place and it's very casual. But we're getting booked a lot!