Do you need an accountant if you’re a musician? The answer, as boring as it may seem, really is yes. Whether you’re performing with a national symphony, teaching music, playing in a wedding band, or aspiring to be the next Ed Sheeran or Katy Perry, our qualified accountants have years of expertise submitting musicians’ accounts to HMRC correctly while making sure you hold onto as much of your hard-earned money as possible.
But the music industry is about more than just musicians. As a leading music accountant firm Pearl Lemon Accountants can help record labels, artist management companies, songwriters, music PR companies and more players in the music business get a grip on their finances and stay on the right side of HMRC.
Tax Basics For Music Industry Professionals
“The taxman’s taken all my dough” was the famous lament of Ray Davies back in the Swinging Sixties, and, without the expert help and guidance of a music accountant, you could end up doing a cover, whether your musical stylings match The Kinks or not.
Keeping Track of Music Related Tax Deductions
Knowing what is and isn’t an authorized expense is crucial to keeping bills under control when it comes to tax preparation for musicians. As specialist music accountants we know all the rules and regulations and we keep a close eye on all the changes – of which there have been a lot since Brexit – that might impact what you need to declare to HMRC and what you can claim back.
HMRC normally considers your agent’s commission, as well as the cost of hiring a musician to join you on stage, to be permitted expenses. Another aspect of touring that is frequently ignored is hotel accommodations, as well as complimentary tickets to shows for publicity purposes.
We can also assist you with royalty revenue accounting, as well as deciphering accounts from record labels, publishers, and distributors to guarantee you’re getting paid your full share and paying the appropriate tax on your earnings.
Things can get even more complicated at tax time if you are one of the many musicians still working a ‘day job’ while you work towards that big break.
Outside the Box Tax Planning for Music Industry Professionals
Did you know that you may be eligible for research and development tax savings if you work in music production? This is well worth looking into if you’re conducting unique research to solve an issue through technology – and something that far too many in the music industry overlook.
Not all music accountants have ever even thought about suggesting their clients look into R&D, let alone actually helped them claim it. What is an R & D credit? The government of the United Kingdom introduced R&D tax exemption in the year 2000.
It is intended to inspire people to devote time and money in scientific and technological developments. The tax break is a reward for individuals who work towards these improvements in a variety of disciplines and specializations.
The expectation is that by allowing these companies to recoup some of their R&D costs, they would continue to invest in R&D, benefiting not only their business but also their industry and the UK as a whole.
Lots of the innovations that those in the music industry just often think of as cool and useful qualify, and if we, as your music accountant, think something you are doing might do, we’ll help you through the process of claiming this valuable tax credit and getting what you deserve.
Record Label Accounting
If you’re running an indie record label by yourself or with a small team, you’re probably filling multiple roles: manager, agent, promoter, and so on. However, you most likely did not start your own label to be its accountant, which is where we can be a big help.
Because as an indie label owner, you’ll be doing – and overseeing – a lot more than you might at a bigger label – it’s all too easy to lose track of your business’ finances. While it’s understandable – and sometimes even unavoidable – to do so, it usually leads to all kinds of headaches if you do, including legal disputes with artists over compensation and awkward conversations with HMRC – or worse – that you certainly don’t need.
Your record label has to keep track of royalties in order to have an accurate picture of how much money artists are making and to offer clear royalty statements. We can assist you in establishing a transparent and effective system in this regard to avoid disputes and keep everyone happy with what they are being paid.
We’ll also assist you with the day-to-day operations of your record label, such as keeping track of your financial transactions with suppliers and filing tax reports, paying employees and more. We can even help you with those dreaded VAT accounts if you sell merchandise directly to the public.
Tax Advice and Tax Planning for Music Professionals
Working in the music industry is rarely a nine-to-five, seven-day-a-week job. Income is unpredictably variable. Fortunately, our music accountant tax planning service for musicians is designed to smooth the transitions between months and years by utilizing tax advantages for creatives to spread out your tax bill.
If you’re an international musician recording, performing, or working in the UK, we can assist you in dealing with HMRC’s Foreign Entertainers Unit (FEU), providing all the documents and advice you’ll need to have productive discussions with UK tax authorities.
This is one of the areas that has changed a lot since Brexit, and it takes a music accountant with their finger on the pulse of these changes to keep up. At Pearl Lemon Accountants we pride ourselves on our ability to stay up to date with the tax codes, even though the UK has the biggest one in the world.
Ready to discuss what a music accountant can do for you?
Contact Pearl Lemon Accountants today.
That way, you can help ensure you'll never be stuck singing
the blues about your finances.