Actor or actress? Our bespoke tax and planning help sheet includes some key information and covers areas of VAT, National Insurance and allowable business expenses which may apply to you.
Firstly, we recommend that you organise your books so that 31st March is your year-end to tie in with the tax year. If you are self employed you will need to complete self assessment and submit a tax return before the 31 January deadline or hire an accountant to do so. If your income is over £83,000 per annum you will need to be VAT registered.
If you have a long running commitment with a theatre or particular show, there could be a dispute whether you are employed or self-employed. If you pay any tax via PAYE keep all payslips along with any P45’s or other statements of earnings. When calculating your income any tax that has been already been paid is important.
Generally speaking, being a self -employed actor or actress will be more tax efficient, allowing expenses incurred to be offset against income. You will be self employed unless you have a regular role or commitment with a show. There have been some famous cases that have changed the tax legislation for actors, but the general temporary nature of work means that entertainers are more often than not self employed.
As already discussed you may need to be VAT registered. If you are self-employed and your income surpasses £83,000, then it is a legal requirement.
If you are VAT registered you will need to complete quarterly VAT return and claim back VAT you incur. An accountant can help you with this.
Anybody that’s self-employed is liable to pay Class 2 and Class 4 National Insurance. Both are collected via your annual tax return.
If you are not already registered for National Insurance we recommend doing so. This protects future benefits such as your state pension. National Insurance contributions can be topped up to ensure compliance, so if you have missed any payments, don’t worry. Contact HMRC to confirm and/or discuss.
If you are self-employed you will incur running costs. These expenses are calculated against your income and will affect your taxable profit . Here’s a list of common actor and actress expenses:
- Accounting fees
- Agent / management fees
- Bank account charges
- Training and career development
- Costumes and workwear
- Costumer cleaning
- Research costs (magazines, books, museum visits & movie subscriptions)
- Marketing, advertising & PR costs
- Legal fees (contracts etc)
- Motor / mileage expenses
- Trade & membership subscriptions
- Website and web hosting costs
- Home office
Remember, it’s always a good idea to seek the advice of a fully qualified accountant to ensure your expenses are allowable before submitting your tax return by yourself.