HMRC offers two methods for claiming home office expenses, each with its own advantages:
- Simplified Expense Method: This is the easier option, allowing you to claim a flat rate of £6 per week (£312 per year) for all your home office expenses. No need to keep receipts, but the deduction amount may not reflect your actual expenditure.
- Mileage Method: This allows you to claim a deduction based on the percentage of your home used for business and the proportion of utility bills you pay. This method requires keeping detailed records of bills and usage for a year, but it can lead to a higher deduction if your home office expenses are significant.
Maximising Your Deductions: Essential Expenses to Consider
Whether you choose the simplified or mileage method, here are some specific expenses you can claim:
- Rent or Mortgage Interest: Calculate the percentage of your home used as an office space and claim that portion of your rent or mortgage interest.
- Council Tax: Similar to rent/mortgage interest, claim a proportional share based on your office space.
- Utilities: Keep track of electricity, gas, and water bills. Claim the percentage attributable to your home office based on usage or space allocation.
- Broadband and Phone: If you have a dedicated line or increased usage due to your writing business, claim a portion of the cost.
- Business Calls: If you use your mobile phone for business calls, keep a record of these calls and claim the related expense.
- Stationery and Printing Costs: Essential office supplies used for your writing can be deducted.
- Computer Equipment: The cost of a computer used primarily for writing can be claimed over several years. Keep purchase receipts for proof.
- Furniture: Desks, chairs, and bookshelves used solely for your writing business can be claimed (spread over several years for larger items).
- Subscriptions and Memberships: Professional writing associations, online research tools, and industry magazines can be deducted if relevant to your writing career.
As ever, keeping meticulous records is crucial. Here’s what to document:
- Percentage of home used for business: Measure your home office space and calculate the percentage of the total area.
- Bills and receipts: Keep copies of bills related to utilities, rent/mortgage, internet, phone lines, and relevant office supplies.
- Business phone calls: Maintain a log of business calls made from your mobile phone.
Tax regulations can be complex, and navigating them on your own can be daunting, so get in touch to chat through what’s most suitable for you and your situation.
So what expenses can be claimed on tax?
Mileage is usually a big one. Whether you’re driving your own car, using a van for equipment, or relying on public transport, record the costs of getting to and from festivals. Remember, you can only claim for travel related to your performance, not for personal trips before or after the festivals.
Of course, with travel comes the need for accommodation. Hotels booked specifically for the festival are claimable expenses. Even a tent, if you decide to really dive into the vibe. Keep receipts and avoid blurring the lines with sightseeing trips that extend your stay.
Chucking your instruments into the back of a van can take a toll, but the costs of repairs and maintenance costs incurred during festival season are valid deductions. These would also include things like instrument strings, plectrums, cables, sheet music and the ‘little’ things can help you make the right noises. The cost of insurance of your vital kit should be factored in too.
If you wear stage clothes, they can be deducted, but if you shuffle on stage in the same T shirt and jeans you’ve had on all day, then that’s trickier.
The life of an itinerant musician doesn’t just happen so if you want to get on, and stay on, the festival circuit, then you’ll need to promote yourself and/or your band. So flyers, online ads, and social media marketing expenses can be claimed, as are website hosting fees, domain registration costs, and portfolio platform subscriptions are all claimable. And if you sell merch, then T-shirts, CDs, and other merchandise you sell at the festival can incur upfront costs. The cost of producing and transporting these items is claimable.
For some festivals, you may have to pay an entrance fee, even if you’re playing, but, if it’s any consolation, that’s a legitimate business expense. Similarly if you have to pay for backstage catering, but be wary of claiming general festival food stalls you visit with friends.
As ever, keeping records is key. Get receipts for everything you claim, from travel tickets to instrument strings. Use a dedicated business account to keep business expenses from personal spending. This makes record-keeping much easier come tax time. Organise your receipts by category (travel, equipment, promotion, etc.) for easy reference, and track your mileage with a dedicated logbook or mileage tracking app.
You may need help with all this and with the financial side of your creative career more generally. We work with musicians a lot and we know the landscape you operate in. Let’s have a chat and we can help you maximise your income so that you can get on with the good stuff.
