Let’s be honest – nobody becomes a musician because they love doing tax returns. You’re here for the music, the creativity, the gigs, the fans… not for working out if your microphone stand is tax-deductible (spoiler: yes it is).
But, like it or not, understanding how musicians get taxed can make a big difference to your bank balance. Whether you’re a gigging performer, a session musician, a music teacher, or you earn royalties from recorded music or sheet music sales, you need to know how the taxman sees your income.
So, grab a cuppa (or a pint, depending on how traumatic you find tax talk), and let’s break it down. Here’s everything you need to know about tax for musicians.
How is your income taxed?
As a musician, you can get paid in different ways. The two most common types of income are:
- Performance income – Money you earn from gigs, session work, or teaching.
- Royalties – If you’ve written music or lyrics and receive payments when they’re used, this is royalty income.
Both of these are taxed as self-employed income, which means they need to go on your tax return. BUT (and this is important), you should separate them into two different income types.
And before you ask – yes, that means keeping track of them properly! The taxman isn’t a fan of “guestimates.”
Should you be a Sole Trader, Partnership, or Limited Company?
Most musicians start off as self-employed sole traders, but if you’re in a band or working with other musicians, you might be better off setting up a partnership or limited company.
Which is best? Well, it depends on your situation:
- Sole Trader – Simple, easy, and best if you’re working alone.
- Partnership – Good if you’re in a band or working closely with others.
- Limited Company – Might be better for higher-earning musicians or those with significant expenses (but comes with extra paperwork).
| The best way to know which one is right for you? Speak to an accountant/tax specialist who knows their stuff (like us!).Drop us a line at [email protected] and we’ll help you decide. |
What if you’re touring abroad?
Ah, international touring – the dream! Playing sold-out venues, meeting fans from around the world… and dealing with overseas tax rules.
If you’re earning money abroad, some countries will deduct “withholding tax” from your payments. This means you’ll receive less money upfront, but don’t panic – you can usually offset this against your UK tax bill.
When it comes to tax for musicians who are touring, a good touring agent should handle your overseas tax returns. But if not, you might need an accountant who understands international tax laws. (Yep, that’s us again. We do that too!)
Tax-deductible expenses: what can you claim?
Here’s the fun bit – working out what you can claim as a business expense to reduce your tax bill.
As a musician, you’ve got expenses that most businesses don’t. For example:
- Instruments & equipment – Guitars, drum kits, microphones, amps, music software, and all the gear you need to perform or record. Plus, their upkeep.
- Travel costs – Fuel, train tickets, flights, hotels—if it’s for work, it’s claimable.
- Clothing & stagewear – If it’s specifically for performances (and not something you’d wear to the pub), you can usually claim it.
- Hair & makeup – If your appearance is part of your brand (e.g., you’re in a band with a distinct look), some costs may be claimable.
- Home studio costs – If you record from home, a portion of your rent, electricity, and internet might be tax-deductible.
- Marketing & branding – Website costs, social media ads, music videos, and press photos.
The golden rule when it comes to tax for musicians? Keep records of everything. No receipts = no tax deduction.
| Need help with your expenses? This is one of the areas where having a review by an experienced tax specialist like JVCA can make a difference. Get in touch today. |
Just starting out? Here’s what you need to do
If you’re new to the professional music world, the most important thing you can do is:
- Keep track of ALL your income and expenses.
- Set aside money for tax (because nobody likes a surprise bill in January).
- Use an accountant who understands musicians (because not all accountants do).
At JVCA, the friendly accountants help musicians get set up with a simple, stress-free way to manage their finances – whether you’re just starting out (and need help keeping your records) or are already smashing it (and need a full-on bookkeeping and financial management process).
| Want help sorting your finances? We get it – you’d rather be making music than dealing with tax returns. And that’s where we come in.Drop us an email at [email protected] for a free consultation. We are specialists in tax for Musicians. |
