The Taxes act states that as a self employed individual you are entitled to claim for expenses incurred “wholly and exclusively for the purpose of trade”. Watch out for ‘duality’ clothes can fall into this category.
Expense categories 1
- Motoring expenses
- Stage clothes
- Footwear
- Overnight accomodation
- Travel
- Stationary
- Telephone calls
- Telephone rental charge
- Instrument insurance
- Instrument repairs
- Cleaning materials for instruments
- Instrument replacements (may be in capital allowance)
Expenses categories 2
- Laundry and dry cleaning
- Music
- Theatre tickets
- Advertising
- Publicity material
- Hire of - rehearsal rooms, recording studios. Musical instruments
- Car parking
- Commissions - paid to agents, managers
- Accountancy fees
Expenses categories 3
- Solicitors fees
- Bad or doubtful debts
- Subscriptions ie Music Week
- Bank charges
- Interest charge on loads eg for the purchase of equipment
- Small consumable items
- Contact lenses
- Some dental work
- Gifts advertising your services - the cost of each must not exceed £50
Expenses categories 4
- CD/Cassette/DVD/MP3 players and discs - to learn new music
- Professional subscriptions
- Other inexpensive items of equipoment ie music stands
Remember - sometimes you have to argue the business use - but don’t be frightened to argue just be realistic
Tricky expenses
- Use of your home as an office - if part of your home’s use is solely for business purposes then you can claim a proportion of the running costs of your home.
- Wages - if its more than on a casual basis you can become liable for PAYE unless its your spouse.
- MU subscriptions - they are allowable - if the tax man argues the point consult the MU
Capital allowances
- “writing down allowances”
- Vehicles - 25% each year of the value ie £4,000 car. first year its £1,000, second year its £750 (value is £3,000 and so on)
- Instruments, computers and expensive items of equipment 50% for the first year and then 25% for the following years as above.