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As a musician, your instruments are your tools of the trade – but are musical instruments tax deductible if you’re self-employed? (Yes, unfortunately not even music can escape the world of taxes!)
If you’re self-employed, you’re required to complete a Self Assessment tax return for HMRC each year to declare any earnings made. But one of the benefits of doing your own taxes is that you’re able to claim back some of the costs as expenses.
As long as you can prove that it’s a business expense, you can pretty much deduct anything. We’ve put together a quick guide on where HMRC stands on musical instruments, and whether they’re eligible for a deduction.
As a self-employed worker, the Tax Acts state that you are entitled to claim expenses incurred ‘wholly and exclusively…for the purpose of trade.’ So rest assured that there are plenty of expenses available for musicians, including those related to instruments.
What qualifies for a tax deduction varies from job to job. For example, as a musician, purchasing a new guitar would be accepted by HMRC as necessary expenditure, but this wouldn’t be the case if you’re a builder trying to do so.
So are musical instruments tax deductible? In short, yes, as long as you can demonstrate to HMRC that the expenditure was incurred as a direct result of your work as a musician or performer. It covers a variety of musical instruments such as:
For further information on what HMRC allows as a deductible expense, you can read their advice here.
Buying yourself a new instrument is one thing, but are repairs covered too? If you have a broken instrument that’s stopping you from performing, then yes. You can claim back expenses on any costs for repairs. As long as you can prove that it was vital to your business, fixing your broken flute or string is an acceptable tax deduction.
Music can be created through a variety of methods that aren’t just limited to physical instruments. DJs and producers, for instance, use production software and equipment. If you’re a self-employed musician who creates music through technology rather than physical musical instruments, you’ll be glad to hear that you’re still eligible to claim it back as an expense.
Here are some examples of allowable expenses:
As a sole trader, you are solely responsible for completing your own personal Self Assessment tax return. But what if you’re part of a band? Can you still claim tax on your group’s instruments, even if it’s not the one you play?
The answer depends on whether your band or group is tied together under a contract, label or limited company. If not, then you’ll all count as separate sole traders in the eyes of the HMRC, and you all must file your taxes individually.
Calculating your tax can be confusing, especially if you’re newly self-employed. To help you understand, calculate your tax below with our handy Income Tax Calculator!
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As a self-employed you have to pay your income tax and national insurance contributions yourself during your annual self assessment. Our calculator helps you quickly assess how much payment is due.
However you may be eligible for a tax refund when:
In your case when you earn £49,000:
You pay no income tax on first £12,500 that you make
You pay £7,300 at basic income tax rate (20%) on the next £36,500