First one is easy, if you’re being paid to play you’re automatically classed as self employed by the government and therefore liable to pay income tax and national insurance. You might think the tax man can’t see you if you can’t see him, but let’s face it, you can’t hide while performing on a public stage. Sure, you stick the money in your back pocket and say nothing, but he’ll find you sooner or later and then you’ll have to pay. Oh, and if you don’t have accounts, receipts, invoices etc. that verify the money you say you’ve made and can be traced to legitimate people, then he’ll calculate what he thinks you owe the treasury and you’ll have to pay it.
However, in addition to paying an accountant to audit your accounts each year, they can also give you valuable advice about what to claim for and other money issues. You are also more likely to manage your money properly, make projections and understand your cash flow, which potentially leads to:
1. Acting professionally towards your business i.e. working with contracts, being organised, timekeeping, taking care of admin
2. Thinking entrepreneurially about different revenue streams, seeking business advice and investment and generally working towards a larger vision for self
3. Focusing on marketing and advertising
4. Teamwork and leadership i.e. Being responsible, accountable, committed and supportive toward your fellow musicians
5. Looking after yourself physically, mentally and spiritually
6. Being motivated to invest in creative development and output (as well as in equipment)
7. Feeling more confident about your own abilities and gaining the respect of fellow professionals.
8. You will be much more likely to make a consistent a profit that will guarantee a yearly income.
9. If you are self-employed and have no accounts to show the bank manager he won’t give you a mortgage.
Note this, many musicians think that paying an accountant is a waste of money or they can’t afford it (they’ve probably never tried to keep their own books!), but the above points all come from real-life stories. Many musicians fail not because they aren’t talented, but because they don’t understand how to run a business!
If you take care of your business, it will take care of you. Get yourself an accountant (or a good book-keeper) preferably one that has some experience of the creative industries and consider getting business and marketing advice.
Next time I’ll be blogging about how thinking about value changes how you set your fee rate.
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