RESOURCES FOR FOLKIES:

The Business Side of Folk

Do you want to be legit. Or part of the black economy?

Income Tax & Accounts

National Insurance – exemption for small income

Public Liability Insurance

Instrument Insurance

Car Insurance

Planning regulations

Marketing & Pricing

Income Tax & Accounts

All income is legally liable to Income Tax. So you need to add profit from your folk activities to your tax return. To calculate your profit, take allowable expenses away from income. Hmrcs has free guides to allowable business expenses.

You need a simple profit & loss account. Expenses are either ‘direct’ so much for each gig (say travelling) or ‘indirect’ (say insurance, instrument repairs) I total up all my indirect expenses for the year, and divide by the number of gigs. Normally you do not need to employ an accountant, you can use the simplified form of tax return (unless you are going to earn mega-bucks!)

Hint: hmrc expect you to make some money from your hobby, so do not try to over inflate your expenses.

National Insurance – exemption for small income

Even if you pay National Insurance for your full time job, you are liable for Class 2 contributions on your Self Employed activities. However you can claim exemption if your earnings are classed as ‘small’ (currently less than £5K) hmrc website has details

Public Liability Insurance

Morris Organisations can provide this, membership of EFDSS includes it. I use Musicians Insurance Service of Matlock, very helpful, and very competitive. (£65 pa for £5M cover)

PAT (Portable Appliance) Testing

Many venues want to see that your PA has been tested. Your friendly local electrician may do this for you for a few pounds, labelling each item, and providing you with a certificate

Instrument Insurance

Can be quite expensive if you have lots of gear, usually does NOT cover losses from vehicles. Again I use Musicians Insurance Service, and adjust values each year

Car Insurance

Does your vehicle insurance cover business use? You may invalidate if it is only ‘Social, Domestic, and Pleasure.

Planning regulations

Are you running your business from home? And maybe claiming use of home as a business expense? Do you need or have consent for this? Nosey neighbours may report you!

Marketing & Pricing

How much do you charge? Only two methods of deciding. There is ‘Cost Plus’ which involves calculating the costs for each gig, then adding a percentage of ‘profit’ or notional wages (How much an hour are you worth? Minimum wage is about £9 per hour)

The other is ‘Market Forces’ How much will people pay? Probably more for weddings than Village Hall do’s

However if your ‘cost plus’ price is more than your ‘market force’ price than you cannot afford to accept the gig!

Performing Rights & Copyright Issues

I am not an expert on this, but if you play tunes composed by someone who has the copyright of it without their permission, you are infringing their intellectual rights. Some people think it is worth joining PRS.

©Peter Cripps 2021

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© Copyright Glos Folk.