BYNC Blog

Tax Preparation for Actors and those in the Creative Industry

Mon, 13 Jan 2025 15:25:39 GMT

Finding your way through the financial world as an actor can feel overwhelming, but we can help you tackle it!

With various income sources, unique deductible expenses, and ever-changing tax regulations, you need to approach your finances in a way that suits your needs. This guide is here to help you with "Tax Preparation for Actors" and "Accounting for Actors," highlighting why having a specialised tax agent is so beneficial.

Why Actors Need Specialised Tax experts

1. Diverse Income Streams

As an actor, you earn from various sources: films and TV roles, theatre performances, commercials, royalties, and endorsements, and each has its own tax implications!

2. Maximising Deductions

Specialised tax accountants know all the ins and outs of deductions specific to the acting profession. We can help you make the most of eligible expenses like working from home, clothing, research, travel, and marketing so you don't overpay your taxes.

3. Regulatory Compliance

Tax laws are constantly changing—especially in the entertainment field. Thankfully, we keep up with the latest updates, helping you stay compliant and avoid nasty penalties.

Key Deductible Expenses for Actors

1. Clothing and Costumes

You can deduct expenses for clothing used for your roles, including costumes and their upkeep.

2. Research Expenses

Going to performances, watching films, and subscribing to industry-related media for research.

3. Equipment Costs

Any necessary equipment—like computers, software, and printers—used for auditions and managing your finances.

4. Marketing Expenditures

Expenses related to self-promotion include creating showreels, maintaining a promotional website, or paying fees for networking events.

5. Travel Expenses

When you travel for auditions, performances, or work-related activities, you can also deduct the costs. This includes public transport, taxis, flights, and accommodation.

6. Health and Gym Costs

If staying fit is part of your acting job, gym memberships and fitness classes are deductible!

7. Training and Classes

Expenses for classes that help you hone your skills—like acting, singing, or dancing—can be deducted! Depending on the structure, the costs for drama school might also qualify as deductions.

8. Professional Services

Fees for accountants, solicitors, and agents are also deductible. These professionals can be very helpful with contract management, financial planning, and securing roles.

Practical Tips for Effective Accounting

1. Maintain Accurate Records

Keeping detailed records of all your income and expenses is crucial.

2. Separate Personal and Business Finances

Having separate bank accounts for personal and business transactions is a good idea.

3. Keep Receipts and Documentation

Keep all your receipts and invoices. Documenting the business purpose of each expense will help you justify deductions confidently.

Strategies for Tax Preparation

1. Estimate Your Tax Liability

We can help you estimate your annual tax liability. This way, you can set aside the right amount and avoid surprises later.

2. Quarterly Tax Payments

As an actor, you should make quarterly estimated tax payments. To stay on top of things, calculate these based on your expected income and expenses.

3. Understand Self-Employment Tax

You're responsible for your income tax and National Insurance contributions if you're self-employed. We can help you with these calculations to make things easier.

4. File on Time

We make sure you file your taxes on time—this helps you avoid penalties!

5. Review Regularly

We will review your finances and tax situation regularly. Staying proactive means, we can adjust as needed.

Making Tax Digital for Income Tax: A helpful guide

Mon, 09 Oct 2023 12:50:06 GMT

For small business owners and the self-employed, staying on top of changes to tax filing requirements is crucial. Getting the right MTD-compliant software in place and preparing ahead of time makes filing your returns and paying your taxes quick and easy, helping to manage your finances so your cash flow isn't impacted.

With Making Tax Digital (MTD), HMRC is rolling out the most significant change to the tax system in a generation. The scheme aims to digitalise the UK's tax system over the next few years. MTD for VAT rolled out for businesses with annual turnover above £85,000 from April 2019 and extended to all VAT-registered businesses, regardless of turnover, from April 2022.

Next in line: MTD for Income Tax (MTD for ITSA)

The programme is set to significantly change how some of those registered for Self-Assessment file their taxes. This article tells you everything you need to know about the new Making Tax Digital Self-Assessment scheme, from what it is and who it affects to how to sign up and what software you'll need.

What are the changes to Making Tax Digital for Income Tax Self-Assessment?

For eligible people, the MTD for Income Tax Self-Assessment (ITSA) will replace the current requirement to file an annual Self-Assessment tax return. Instead, you'll use software to keep digital records and file updates at least every quarter via MTD-compatible software to HMRC.

MTD for Income Tax is set to roll out from April 2026 and will cover all unincorporated businesses (sole traders) and landlord's annual business and/or rental income over £50,000.

Businesses with an income between £30,000-£50,000 have until April 2027. If your income is below £30,000, you can continue using the existing Self-Assessment system. However, the government is implementing plans on how MTD can best be used for these smaller businesses.

The government aims to increase the accuracy of the returns with this new system, making it easier to get taxes right and saving time and money - for both HMRC and the individuals and businesses affected.

Under MTD for ITSA, you'll be required to:

Keep digital records, use compatible software to submit quarterly information to HMRC, or use bridging software to connect spreadsheets.
Report your financial data to HMRC at least every quarter.
Finalise your taxes at the end of your accounting period and submit a final declaration.

The scheme is called Making Tax Digital for Income Tax Self-Assessment, or MTD for ITSA. You can find out more by emailing hello@bync.co.uk .

How to sign up for Making Tax Digital for Income Tax Self-Assessment

If you're eligible for MTD Income Tax Self-Assessment, you must sign up with HMRC before the scheme becomes mandated in April 2026 for incomes over £50,000 and April 2027 for incomes over £30,000.

Before you can sign up, you'll need the following information:

Your business name and start date
Your email address
Your accounting period and accounting type (e.g., cash or standard accounting)
Your National Insurance numbers
The Government Gateway user ID and password that you use to file Self-Assessment tax returns

Once you have all your information, you're ready to sign up. The first thing you need to do is get HMRC-recognised functional compatible software. We can help; please email hello@bync.co.uk for more information or to find out more about Maxing Tax Digital.

Sole trader versus Limited Company - which is best?

k.baldwin@phusei.com (Kim Baldwin) — Mon, 09 Oct 2023 12:38:12 GMT

Starting your own business and working for yourself can be an exciting yet daunting time. One of the first decisions you will have is whether to run your business as a sole trader (self-employed) or a limited company, but what is the difference?

The most significant difference between a being a self-employed sole-trader and being a limited company is that a sole trader business is owned (controlled) by one person with personal liability for the business. In contrast, a limited company will split its ownership into equal shares.

There’s no one-size-fits-all solution and deciding the best business structure should be based on your circumstances. The below highlights some of the similarities and differences between the two, giving you a brief outline of what to expect from each one.

*** Directors are not classed as self-employed; they’re simply required to report additional taxable income via Self-Assessment (the system HMRC uses to collect Income Tax). If all your income is taxed at source, you don’t need to register for Self-Assessment and file a return.

What is a sole trader?

Being a sole trader means that you are personally responsible for your business. You can employ staff, but your business is owned and managed by just one person: you. As such, legally your business and you are one which means you are personally liable for any losses that your business makes, but this does mean that you personally can keep any after-tax profits.

Advantages of a sole trader business?

You can keep your business’ profits after tax.

Disadvantages of a sole trader business?

You are completely liable for any losses your business makes, and you may have to use your own money to repay any debts.
There’s no one to share accountability with. Whilst you can hire staff, all other important decisions lie with you.

What is a limited company?

If you decide to run your business as a limited company, you will be setting up a private organisation to run your business, and have its own legal identity separate from you, and its financials will be separate from your own personal finances. As Director of your limited company, you will have limited liability on any losses or debts incurred by the business.

Advantages of running a limited company business?

As a Director of your limited company, you can choose how and when to get paid. Dividends have a lower tax threshold than salaried pay, which means you are more tax-efficient than when just salaried.
The Shareholders have a limited liability should your business incur losses or debt; it’s not your personal responsibility.

Disadvantages of running a limited company business?

There are more difficult and time-consuming administrative and tax tasks, when running a limited company as opposed to operating as a sole trader.

How we can help at BYNC (By Nature Consulting)

At 'By Nature Consulting Tax and Accounting', it's our mission to help support you with the necessary filings and to help you simplify those tasks that get in the way of you doing what you do best.

We provide you with the best-advice, tailored to you, talking you through the different business structures, alongside tax-efficient planning to save you money. We’ll be with you throughout offering bespoke tax and accounts advice and support whenever needed. For more information, please email hello@bync.co.uk .

She Means Business is Launched

Mon, 20 Feb 2023 12:54:31 GMT

She Means Business, the business support organisation for women looking to become self-employed, has officially launched.

Lead by female entrepreneurs, Kim Baldwin and Sue Hedley, She Means Business offers practical advice and confidence coaching to empower individuals to become their own boss.

Specialising in helping women, She Means Business is a comprehensive business support service that includes seminars, online discussions and tailored packages which provide the tools to run a successful business. Combining the personal attributes and legislative requirements, working with She Means Business means looking at establishing a business holistically.

Bringing together their wealth of experience, not only advising female business owners but being business owners, Kim and Sue offer advice and support to women thinking about starting their own business. Through a combination of financial planning including tax, business registration, expenses and accounting, Kim can guide those looking to become self employed with the necessary requirements. Sue offers confidence coaching and personality mapping to enable individuals to achieve their aspirations through clear thought processes, goal setting, motivation and self-belief.

Assessing and supporting both emotional and practical business wellbeing sets She Means Business apart from other business support organisations. Looking at the individual first, the organisation brings tailored advice and real working exercises to elevate the planning stage into implementation quicker.

Kim Baldwin, Managing Director of By Nature Consulting Limited explains, “Together Sue and I have a unique combination of skills and via She Means Business provide an excellent service to those wanting to start their own business. Help is via emotional and mental planning alongwith business accounting and registration.”

The organisation also offers follow up support packages to businesses offering confidence coaching, accounting, marketing and project management which are tailored to the individual business. Sue Hedley, Managing Director of Confidence First Coaching explains, “She Means Business is an organisation that will support the individual on their journey of self employment. We aim to provide a simple route to success through tailored packages that remove the doubt and pressure of being a start up company. We will be there for as long as the business needs us.”

If you are interested in attending the first She Means Business Seminar, register for your FREE place here or find out more www.she-means-business.co.uk

At my Expense

Wed, 20 Jan 2021 16:24:04 GMT

When the pandemic hit last March undoubtedly the most significant changes were to our working day. Employers were faced with difficult decisions and challenging strategy modifications in order to react to the ever-changing landscape.

With the economy in turmoil and legislative changes happening frequently, the safest and simplest option was to instruct employees to work from home.

If you were someone who had never worked from home before this took some adjusting. Spare tables, rooms and areas were turned into offices and laptops and Wi-Fi were upgraded to cope with the new normal. With the “stay at home” message loud and clear, your commute became a great way to start the day.

However, with these changes came associated costs including gas, electric, software, furniture and water – all of which would not have been incurred had homeworking not been introduced. Items such as chargers, headsets and computer equipment were purchased along with video calling software which really came into its own in the last few months.

In essence, you have set up and managed your own satellite office of your employer and so now, in the same way as the self-employed do, you are entitled to claim expenses via HMRC – even if you work part-time.

We appreciate not everyone is au fait with HMRC processes and so at By Nature Consulting Limited we offer a straightforward expenses claim service.

Using our online submission form, simply enter key details of your costs, your bills and your employment status and we will do the rest. It doesn’t matter if you have worked at home for one day and the rest of the week at your usual place of work or if you work part-time or full time you are entitled to claim.

Once submitted, we will review your information and your account manager will be in touch. We understand some costs may be difficult to quantify so we are happy to advise where necessary and talk you through how the process will work.

Your account manager will monitor the claim on your behalf until completion and be available throughout the process should you have any questions. They will also be able to advise you on any other taxation or HMRC queries.

This isn’t just exclusively for those who have worked at home during the corona virus pandemic either. If you have worked at home at any time in the last six years, we can review your tax submissions and submit a claim for expenses on your behalf.

If you would like to know more click here or contact us .