What Can an Actor Claim on Tax in the UK
Understanding Taxable Income for Actors
As an actor who’s busy working on your next job and focusing on growing your career it can be hard to understand how to maximise your profits and minimise your tax burden.
But, to reduce your taxable income it’s important that you understand what you can and can’t claim on your tax return.
As accountants for actors that are new to the industry and even to those working in it for decades, we’ve got a wealth of experience in helping people like you stay on the right side of HMRC
First: What you need to know about income and tax thresholds
Actors can earn income from a variety of sources, including:
Employment income from a production company or theatre
Self-employed income from freelance work
Royalties earned from past performances
The threshold for the 2023/24 tax year is £12,570. What this means is that if your taxable income is below this threshold, you will not have to pay any income tax whatsoever. However, if your taxable income is above this threshold, you will be required to pay income tax on the amount earned above £12,570.
If you’re self-employed, you will need to complete a self-assessment tax return each year to report your income and expenses. You will also need to pay National Insurance contributions on your self-employed income.
What are allowable expenses?
In short, allowable expenses are the expenses that can be claimed on your tax return to reduce your taxable income. As a good rule to follow, expenses are allowable only if they are incurred wholly and exclusively for the purposes of your work. Examples of allowable expenses for actors include:
Accommodation expenses for out-of-town work
Travel expenses to auditions, rehearsals, and performances
Professional subscriptions and union fees
Costume and wardrobe expenses
Agent and management fees
Training and coaching expenses
Marketing and publicity expenses
Make sure to keep accurate records of your expenses throughout the tax year. WIthout these records you won’t be able to submit the costs on your tax return! This is very important.
Claimable Expenses for Actors
We mentioned a few examples of allowable expenses above, but let’s dive into some of these in a bit more detail:
Travel and Subsistence
If you need to travel for work-related purposes, you can claim the cost of your travel expenses. This includes the cost of taxis, public transport, and even mileage if you use your own car. You can also claim for subsistence expenses such as meals and accommodation if you’re required to stay away from home for one night or work for work purposes such as filming on location.
Clothing and Costume Expenses
Actors can claim for clothing expenses that are used exclusively for their acting roles. This includes the cost of buying and maintaining costumes, as well as any necessary alterations. However, you cannot claim for everyday clothing that you wear outside of your acting roles so make sure that what you’re claiming is exclusively for work.
Training and Professional Development
If you purchase and attend any training courses or workshops that are directly related to your acting career then you can claim the cost of these as a tax-deductible expense. This includes any classes or courses that help you to improve your skills or knowledge as an actor.
Marketing and Self-promotion
Actors can claim for marketing expenditure such as headshots, showreels, and website hosting fees. You can also claim for the cost of attending networking events such as industry conferences and workshops.
Specific Deductions for Performing Artists
As a performing artist, aside from the expensable items outlined above, you’re also entitled to claim tax deductions for certain costs that are tied intrinsically to you performing your job. For example:
Agent and Management Fees
If you’re represented by an agent or a manager, you can claim the fees paid to them as a tax deduction. This includes any booking fees, commissions, and other charges that you may incur in the course of your work. However, you cannot claim expenses that are reimbursed by your agent or manager so be careful to ensure that what you claim is only what you have been charged.
Equipment and Technology
As an actor, director, sound technician or performing artist, you may need to use certain equipment and technology to carry out your work. This may be a laptop, ipad or piece of software that you use for work purposes.. It’s important to note here that if you use the equipment for personal applications as well then you can only claim a portion of the cost as a deduction on your tax return.
Home Office and Working from Home
If you work from home then you can claim certain expenses as a tax deduction. This can be the cost of electricity, household utilities, heating or other amenities that are essential for you to carry out your work at home. This can also include repairs and maintenance costs that are incurred for your home office, as well as a portion of your rent or mortgage interest.
Navigating HMRC Regulations
When it comes to claiming tax deductions as an actor in the UK, one of the most important things that you can do is understand the regulations set out by HMRC. Here are some key things to keep in mind:
VAT and National Insurance
As a self-employed actor, you will need to register for VAT if your annual turnover exceeds the threshold set by HMRC which is £90,000 as of the 1st April 2024. Additionally, you will also need to pay National Insurance contributions on your earnings as an actor. What this means, importantly, is that you should forecast your earnings and outline the expected tax to be paid to HMRC as well as any VAT & National Insurance payments to be made.
Record Keeping and Receipts
We’ve mentioned above the importance of keeping receipts and records of your costs. This isn’t just because it shows good organisational skills (although it does!); it’s because should HMRC ever audit your income & expenditure vs. what you have outlined on your tax return, you’ll need to show evidence of the expenses that you’ve claimed.
Filing Tax Returns
As a self-employed actor, each year you’ll need to file a tax return with HMRC. Within this tax return you’ll need to include accurate figures for both your income and expenses for the tax year, as well as any deductions that you’re claiming for. It’s vital that submissions are filed on time (by the 31st January) and payments are made promptly to avoid facing any penalties which can cost you more!
Navigating the world of finances and accounts can be difficult, especially when you’re working hard to grow your career as an actor. That’s why Blue Skies has built decades of experience working with actors, like yourself, to take care of their tax return, bookkeeping, tax payments and more - making sure that you stay on the right side of HMRC while you dedicate your time to your craft.
For a no-obligation chat to find out how the Blue Skies team can help your career & financial wellbeing grow, contact us today on 01767 699996 or thecrew@blue-skies.tv.