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50% of self-employed musicians overpay tax according to Sarah White of Accountancy Daily

Half of self-employed artists and musicians overpay taxes due to unclaimed deductions for essential expenses and less than a third use an accountant

A significant number of artists do not fully utilise tax-deductible expenses when completing their self-assessment tax returns. Essential expenses such as music subscription services, studio time, and travel costs are often overlooked.

The most commonly missed tax-deductible expenses are music subscriptions, studio time, travel to and from shows, and equipment cost and maintenance, found a survey of 500 bands, producers, DJs, and live performers by music studio network Pirate.

Only 30% of artists used an accountant to handle their tax affairs, although one in four used an accountancy app.

While 90% incurred expenses on studio time, 40% of them did not record these costs as a business expense. At the same time, 80% spent money on buying or maintaining instruments and equipment, yet 30% of artists did not record this cost.

There was widespread confusion among artists regarding what can be expensed on a self-assessment tax return, Pirate said.

The survey uncovered not only a gap in financial literacy but also a lack of financial stability, making it difficult for artists to outsource this administrative work. Over half (51%) of artists surveyed had no savings, with 48% reportedly in debt.

‘Almost any cost that relates to your role as a ‘business’ should be scrutinised for potential tax relief. This means you’ll need to consult with your accountant (if you have one) about which expenses qualify, or meticulously review your outgoings yourself if you’re managing your tax return independently,’ said Emmavie Mbongo, artist and community manager, Pirate.

‘Accounting and taxes aren’t what most people dream of when they imagine their music career taking off. In fact, managing your own finances is one of the most intimidating parts of monetising your talents, but it becomes necessary very early on.’

Looking at how this might be affecting artists’ wellbeing, when asked how often they worry about money, only 4% of artists said never, while 26% said they worry every day.

Financial concerns primarily revolved around housing - maintaining rent payments, obtaining or paying off a mortgage, and the cost of bills and food. Being unable to afford cultural activities was also a significant concern.

When discussing financial aspirations, 21% aimed to clear debts, 14% to save, another 14% to buy a house, 10% sought more music-focused time, and 6% were working towards affording the essentials like bills, food, and rent.

Thank you, Sarah, for the heads up.

If you are a musician and you want some reliable free advice, we love Pirate – check them out here on tax deductible expenses guide 

And, of course, you can always talk to us.