As actors there are many facets to your income and expenditure, which differ incredibly from those of, say, a plumber or even a writer. This means filing tax returns for actors can be a laborious process.
Legally, taxes claimed against need to be “wholly and exclusively incurred in the performance of the business” but this has always been a grey area and continues to be so today. For example, most self-employed professionals wouldn't be allowed to claim clothing as an expense but if an actor were to buy clothing for a specific performance or need specialist gear for rehearsals then this expenditure would be allowable. Similarly, those performers required to attend film premieres or award ceremonies, where they are likely to be photographed for publicity purposes, are arguably in need of purchasing certain clothing.
Ultimately, as with many other creative professionals, everything an actor does can be related to their work. You have to know what is going on in the world of theatre and television and must subscribe to magazines, attend social gatherings, networking events and not to mention trips to cinema showings. However, as with all matters tax, actors need to tread carefully when filing a tax return.
The content of this article is intended for general guidance only and represents our understanding of current law and HM Revenue & Customs practice. If you would like further information or advice regarding your tax return, please contact us today and we'll be more than willing to assist you.
Tax is payable on 31 January and 31 July. If we were all perfect we'd all have put aside enough to settle our liabilities and it's be a straightforward process, but for actors, often the payment due on 31 January is the killer, since an actor’s taxable income is most certainly not consistent and you may have to cope with long spells of unemployment. You don’t need to be an accountant to understand that basing a tax return on last year’s income, usually bears no relation to the actual income earned.
Plainly, because income from a profession in the creative industry can fluctuate so wildly from year to year, it really pays to put some money aside as you go along. As a performer, you may end up paying high taxes relating to a previous when suddenly you are earning next to nothing.
How much to put aside is dependent on your expected and previous earnings and can be anywhere between 10-50% depending on your level of income.
For professional expert advice on tax for actors, speak to us today.