Musician's first tax return...

[jt77464]

Following sage advice on this forum a while back I registered self employed. I'm a full time grad student but run a little jazz band from which I earned about 5k this tax year. Well under the 6475 tax limit.

Now this self assessment thing is somewhat complicated, and it seems to think I owe 740 quid in class 4 NICs. I already have a direct debit to pay class 2s, and I think class 4 has come up wrongly because I must've put in some information about my 'business' which is the name of my band. We have no assets, just a website which is our branding. Does that constitute a business?

Perhaps I should delete all the bit about the business and net profit bla bla bla. Basically people just email us to play at their wedding/party, we turn up, play, and cash the cheque. Is that a business?

Either way, I just want to add up the amount I earned and stick it in some obvious box in the self assessment thingy, but it doesn't look that easy. Hence I'm rather confused, and could do without any class 4 NIC liability. Thanks for any tips you might have, J

 

[Willself]

HEHEHEHE!! NO FIDDLES!! LOL

 

[jt77464]

Er, think I'm being a bit dumb. I only registered self employed in late August 09, so presumably they'll only be interested in April 09 to April 10 right?

They didn't send me any letters telling me to do a return, I just heard about it on the radio that the deadline is soon, so I can probably relax till next year. I hope.

 

[Zeno]

The band is a trading activity (if you were doing it for fun you wouldn't be charging) so it is a business and the Class 4 NIC apply.

Have you considered how you are treating your instruments? Surely these are assets?

 

[Zeno]

Er, think I'm being a bit dumb. I only registered self employed in late August 09, so presumably they'll only be interested in April 09 to April 10 right?

They didn't send me any letters telling me to do a return, I just heard about it on the radio that the deadline is soon, so I can probably relax till next year. I hope.

No, no return due this month so this leaves you plenty of time to see an accountant.

 

[jt77464]

Yes, on my letter from HMRC it says "we will let you know which tax return we want you to complete". And they haven't sent me anything.

And on the online portal it has a load of blanks next to the following fields:

Tax year ending 05 Apr 2009.
Issued on:Not issued
File on paper by:
File online by:
Submitted on:
Received on:

So I'm pretty certain I don't need to do anything.

I will speak to other musician friends to see how it works. I'm pretty sure none of them pay class 4, even when they have a website set up, but I will double check. Thanks for your very prompt advice everyone

 

[Jenni384]

I have musician clients and it's not often profitable so, if you are, congratulations!

Depending on what you play, you likely have some rather expensive equipment - as Zeno asks, have you included these and, if so, how?

What about travel expenses? Do you have to travel far?

If the answers are "I haven't included these" then speaking to an accountant may well help get that tax and NI bill down.

I suspect that a few musicians don't declare their income and therefore don't pay class 4. This is not a legitimate or legal way to do it. If a profit is being made then tax (and NI) must be paid, subject to normal rules.

No, it doesn't look like they have issued a return for 0809 so it looks like you can do nothing for now. They will issue you a notice to file in April-time.

If you've earned under the personal allowance and you followed the self assessment form online and it looked like you owed tax/NI, then perhaps a chat with an accountant may help you out for the 09-10 return?

 

[jt77464]

Thank you, that's helpful.

My instruments are worth about £1500, about £500 of which I've bought this year.

I basically run the website and do all the talking to clients. I pay my musicians (mostly students like me) after each gig. I hope that doesn't make me an 'employer' liable for even more NI?

We don't travel far, so maybe £5 petrol per gig. I've never kept a note.

Only other costs are maybe £100 a year on flyers, cards, and web hosting fee. As I say, we're just a bunch of students who like to earn a bit by playing events. In the current tax year, until April 2010, I don't expect to have earned more than 5 grand. I haven't worked out how much 'the band' has earned in that time, ie the amount I've paid the other fellas, but I dare say I could work it out if I had to. But I don't know if I need to worry about that on the form. I'll have to wait and see.

Thanks again