As a professional musician in the UK it's important to get organised early to avoid any unwelcome surprises from HMRC. This guide will help break down the essentials, from understanding your income tax and National Insurance contributions to managing expenses if you're self-employed.

In the UK, you won’t pay income tax on earnings up to the current personal allowance amount. However, once you exceed this threshold, tax is payable on every pound over it. Most income is taxable, but here are a few common types of non-taxable income:

If your total income is less than your personal allowance, you can complete a form to reclaim any tax already deducted.

If you work for an employer you'll be taxed under the Pay As You Earn (PAYE) system. This means tax is deducted directly from your salary before you receive it.

In most cases, employed musicians can only claim tax relief on job-related expenses deemed "wholly, exclusively, and necessarily" for the job (e.g., violin strings for an orchestral player).

Self-employed musicians are taxed differently. Without an employer to deduct tax, you must keep track of your income and expenses and submit these to HMRC annually.

You'll need to keep detailed records, including receipts, invoices, and bank statements, as proof of your income and business expenses so you can claim expenses to reduce your taxable income.

You’ll pay tax on your profits, not your gross earnings, so tracking expenses carefully is key to reducing your tax bill.

When self-employed, you'll typically pay tax in two instalments each year:

Since your tax bill isn’t calculated until after the tax year ends, you’ll have time to prepare, but this also means you need to set aside money for it as you earn.

As a self-employed musician, you can deduct business expenses from your income to reduce your tax bill.

Large purchases like instruments or equipment are considered capital expenses. You may claim these as "capital allowances," spreading the cost over several years or deducting the full cost in one go if it's under the threshold. Check the current figures on the Government website.

HMRC requires self-employed people to maintain detailed records of both income and expenses. You’ll need to track:

As a musician, you also pay National Insurance Contributions (NICs). If you're employed, these are deducted by your employer. Self-employed musicians, on the other hand, pay the current NIC class required. See the Government website for the latest fees.

Many musicians find themselves both employed and self-employed. In this case, your employer will deduct tax under PAYE, while you file your self-employed earnings separately.

A good accountant can ensure you're claiming all the allowances you're entitled to, help with tricky calculations and even communicate with HMRC on your behalf.

If you decide to become self-employed, you must register with HMRC within three months of starting. Failing to do so could result in a fine. Once registered, you’ll be sent a tax reference and start to pay NICs.

Whether you're employed, self-employed, or both, it pays to stay on top of your taxes early on. If you’re unsure about anything, consider seeking professional advice, and always keep track of your income and expenses to make your tax life easier.

For more information please take a look at our website article at https://musicteachers.co.uk/music/tax-guide-for-professional-musicians