Band Deposits - Not sure if I have to declare this or not??

anna2709

Hello
my partner is in a band; it started out for fun but over the past (tax) year they have played some gigs and got paid (I know he has to declare his share of the band earnings on his tax return). What I need to know is this - when someone books the band and pays a deposit, the cheque is made out to me. As soon as the cheque clears I withdraw the cash and hand it over to the band - the deposit covers things like studio rehearsals, repairs and replacements to equipment etc.

what I'm not sure about is whether I declare this on my tax return even though it's not my money (it's about £500 total), or they each declare a share of it on their individual returns, or (since it all goes towards expenses) it gets declared at all?
I don't want to get it wrong!
Thanks

chappers

They should all declare their share as income and offset their expenses against that income. Not sure how it would work with a band would have thought it would work as a partnership, as they can't all act independantly and use say a quarter of a reciept for say rehearsals as an allowable expense.
If they wanted to act as individuals they would have to take a whole reciept each as they need to be kept for their records.
Give HMRC aring they will let you know how to work it.
You don't need to be declaring it in any way.

fengirl_2

Unless a band is a well-established entity, eg The Beatles, it is usual for each band member to declare their share of the earnings independently. In the semi-pro world, band members are more likely to come and go and, unless they are earning record royalties, there are unlikely to be any joint and several libailities.
By accepting payments on behalf of the band, you are technically becoming involved and acting as their agent. I do not therefore agree with the previous poster who says you dont declare this income. As a taxpayer, you are potentially open to investigation by HMRC who would want to see your bank statements on which these cheques would appear. Pubs and clubs who book the bands will be writing cheques to you and then claiming a deduction in their accounts for the payments, so you would potentially show up in their accounts.
I would get the deposit cheques made out to one of the band members in order to keep in 'in the group' and not involve you. That person would then maintain records to show exacly how much he has paid other band members and there would be a rock-hard audit trail.

anna2709

Thanks everyone.
When the band play a pub for example they are paid in cash - the only time a cheque is involved is when it is a deposit for a wedding for example, the balance is paid in cash as we've had problems with cheques bouncing for the deposit so would never accept cheque payment for the balance.
The guys will declare their cash income on their tax returns but I wasn't sure if I had anything to declare as it is not my money - as I said it gets handed over as soon as it clears. They have receipts for the rehearsals, equipment etc.
From now on I will suggest someone else accepts the deposit cheques but I wasn't sure what to do with the ones that have already been through my account.

chappers

As fengirl says you could be seen technically as their agent and in the eyes of HMRC need to include it in your tax return. The net effect on you would be zero though as you will have made no profit, you would have an incom equal to your allowable expenses.
In reality if HMRC investigated you all I'm sure they would accept your explanaition, provided it all tallied up with the incomes declared by the other band members.
Personally I agree with fengirl unless there is some unavoidable reason why the cheques should be made out to you I would get them made out to one of the band members, or even get them to open an account in the name of the band.