Have you ever had questions about tax returns but not sure what exactly counts as an expense, what counts as income, or how to organise it throughout the year to make your life easier at the end? Are you a performance artist who loves your job but hates end-of-year for one reason, and one reason alone?
Doing your tax is absolute bollocks innit! Probably the worst thing about it, is that it wouldn’t be half bad if we knew how easy it could be! It’s not like we can just google “performance artists how to tax” and find what we’re looking for. I’ve learnt the what’s and how’s from trial and error, from older theatre makers/mentors and from my badass accountant (ooo fancy………………..for a performance artist).
For the purposes of showing you how I claim certain things- I’m a writer, performance artist and theatre maker that makes my income solely through performance jobs (as a sole-trader/ freelancer). My income comes in from working for other artists, arts grants, arts council funding, and commissions from theatres and institutions. Once in a while I take up bar shifts or teach at university, both of which have a different tax thing going on (I’ll explain below). I most definitely used to think this tax shit was the WORST. It’s actually sort of easy(ish), I PROMISE! I’ve had to do it in 3 countries (Maybe I’ll do one for touring artists soon- that’s another shit storm to conquer on another showbiz day—–why do they hate artists? It’s a nightmare!). Special thanks to my accountant (Bloodwood Accounting) who is an absolute legend and helped me develop some of this language-If you’re a freelancer or make money in “alternative” ways, and need an accountant- please go to them! They’re reasonable and will get the job done (quick)! I know end-of-year is soon- so get on it. (They haven’t paid me for this promo lol- they genuinely are the best ‘kay). Here’s how to find them- https://bloodwoodaccounting.com/ )
DATES: Tax year is from the 6th of April to 5th of April and the returns need to be submitted by the start of next the calendar year. For example: for the year 6th April 2018- 5th April 2019, we ought to be submitting it by Jan 2020.
INCOME: You will need to log as income anything that you invoiced for (however small the amount) and things payed into your bank account/s. Including arts council funding!
EXPENSES: You can expense a lot of shit! What counts as an expense in my world?
- Haircuts (if I can prove it was done before a show, audition or a tour).
- Rent (a % of it is calculated depending on how much of the space you can prove you work in. Eg: holding meetings, rehearsing, making props/art etc.Or if you store costumes and props and other show stuff. I expense 35% of my rent because I work from home a lot.)
- Phone bill ( a % should be calculated depending on how you use it for your work. I expense 50% of it because I use my phone internet on the go to work on emails, google docs etc and most of my calls are for work related things).
- Advertising/ publicity- including Facebook and Instagram promos, website related fees, any sort of printing like flyers or posters).
- Costs in developing your practice– like hire of rehearsal space or desk space, learning new skills, workshop fees, dance classes, needing equipment like a camera or editing software etc.
- Travel- All travel to and from: shows, rehearsals, admin days, work related things, networking and research trips. Including domestic and international airfare, train tickets etc. (I expense 85% of my local travel charges (TFL charges), cause I don’t do much else but work related things.)
- Research– Now what counts as research? Surprisingly, a lot of things! Theatre show tickets, movie tickets, books, DVDs, subscription to websites/resources, museum visits. You can even put in your Netflix subscription as an expense if it’s related to your work and you need to watch shows for inspiration. Eg: if you’re a comedian, or a scriptwriter, or a documentary maker. As artists, we draw inspiration from a lot of different sorts of things so maybe you have a Science journal subscription, still counts are research if it’s related to your practice.
- Networking– Networking expenses count but what counts as networking? When you work in theatre, the line between ‘professional’ and ‘personal’, ‘work meeting’ and ‘friend hangs’ is blurred. Now, if you were to meet someone for a coffee that you work with in some capacity for a work related meeting, you can expense that. You can also expense food, drinks and travel involved in any sort of work meeting or networking event with anyone that you’re seeing for a professional reason (even if it is just for networking’s sake). This includes things like: if you go to the theatre with a colleague, and you have to pay for drinks, this counts as a work trip- expense it!
- Tax Agent’s Fees– you can expense this lol!
- Travel Insurance– If you travel for your art, your travel insurance can be put down as an expense.
- Props and costumes– things used in shows/ or bought for research and development.
SOME OTHER STUFF
Arts Council Funding– You’ve got to declare the entire amount as income. If you pay people from that grant, all of that counts towards the expense total (SAVE THE INVOICES they send you!).
WHAT AMOUNT DO I GET TAXED AT?
As a self-employed person, if when you do the math (total income minus total expenses) and you earn less than 11,850 as PROFIT (i.e income [minus] expenses)- you won’t be taxed. If your profit is more than £8,400, you’ll have to pay some national insurance. For a lot of freelancers, especially in performance, we work 7 days a week 24/7 and everything we do/ spend money on, is often related to our field. Whether it’s shows we see, or dinners we get with fellow performers etc. If that’s your case, and you don’t earn millions, you can easily expense enough to have a profit less than 10K! ( I even got money back this year WAAA?! No really!).
HOW DO YOU MAKE THIS “EXPENSES” SHIT EASIER ON YOURSELF FOR END OF YEAR?
KEEP YOUR RECEIPTS (for at least 6 years). Start asking for receipts for EVERYTHING. I bought myself an expanding folder from PaperChase and labelled them April-March and put all my receipts per month in it.
GET A MONZO CARD (they’re not paying me for this endorsement either, but they should be TBH). Monzo has made my life much easier! You can put each transaction down as an expense on the banking app itself and attach the picture of the receipt as you go (takes roughly 15 seconds to do this each time, which means it saves me the stress at the end of the year figuring out what transactions can be expensed). When it’s time to do the deed, I highlight all my expenses in one colour, and my income in another colour and then calculate it. This might not be helpful for this year but will be for next year! I also try and send all my income to one bank account so I can keep track of it even if I lose my sent invoices. Or you can pop all your sent invoices into a folder.
WHAT IF YOU GET PAID FOR OTHER JOBS LIKE BAR WORK OR TEACHING?
If you’re being paid by universities or other institutions for short contracted work, they will mostly be taking tax from your fees before they send it to your bank account. Check your contracts/ pay slips to know how much. If so, make sure to note that down on your return form cause you might be entitled to get it paid back!