Actors' Taxes Guide for the UK
As an actor, taxes may be the last thing you want to deal with – just leave it alone and it will all go away!
As the tax deadline gets closer, it can become a source of stress and there’s always a lot to think about with tax (there are literally tens of thousands of pages of tax law) – below we’ve made it simple and you have a good place to start your return.
First year for actors
If this is the start of your acting career, or you have come back from a break, the first thing to do is register as self employed with HMRC so you can file the self assessment tax return.
You can register with HMRC here.
After you register for self assessment, HMRC will email or write to you throughout the tax year to remind you of the tax filing deadline.
Income for actors
Especially when you start out, you may have a mix of work as you look to become established in the acting industry.
When you are living in the UK, you will need to report your worldwide income on the UK tax return.
That includes:
Employed work - if you have any roles where you are treated as an employee, possibly where you are contracted for a production, or you have a side job with your acting (such as teaching), you will receive pay slips and a P60 at the end of the tax year, or a P45 if you left before 31 March 2020. The employer should deduct tax from each pay slip and you will include both the income and tax deducted (PAYE) on your tax return
Self employed income - you will normally send invoices for all your self employed work, or you may have an agent who will invoice on your behalf and provide you with statements. When you complete the self employed pages of the tax return, you show the income before any deductions (e.g. agent's commission) - the deductions may be allowable as a tax expense
Partnership income - if you set up as a group and invoice collectively, you will be a partnership for tax purposes. You will need to register the partnership with HMRC and file a separate partnership tax return each year. The profits (or losses) will then be split amongst the partners and they will pay tax themselves on their personal tax returns
Investment income - all bank interest, dividends, share sales and other capital gains will need to be disclosed on the tax return
Individual Savings Accounts (ISAs) - any interest, dividends and capital gains from ISAs are tax free in the UK and do not need to be disclosed on the UK return
Property income - if you rent out a property, or a room in your house or flat, you will need to show the income and expenses on your tax return. If you sell a property, that will also need to be disclosed, there are tax reliefs for selling your home
Foreign income - if you receive foreign while you are living in the UK, you will need to report that income on the UK tax return. Even if you have already paid tax overseas, you still report the income and then you can claim the foreign tax as a credit against the UK tax
Pension income - the state pension and private pensions are both taxable in the UK. The state pension does not have tax withheld when you receive it, but the private pension may have - you report all pensions on your tax return with any tax already withheld
Expenses for actors
Actors are in the lucky position that you can claim for many expenses that most people can’t.
You just always need to make sure that the expenses are reasonable and directly related to your work and that they are “wholly and exclusively” for the purposes of your business.
Having said that, what’s reasonable, ordinary and necessary will often depend on your income and what level you’re at. If you’re famous, you may need to pay extra for privacy which may be seen as extravagant, but in reality, is necessary for you to work.
Agent commision and manager fees – all the fees you pay to your agent and manager are allowable
Hair and make-up – when you incur the cost for a specific job or audition, required to maintain your appearance
Wardrobe – the general rule is that it’s clothing purely for the role and there will be no personal use. Clothing expenses for a role in a film, stage or TV performance is allowable. The clothes are not part of ‘an everyday wardrobe’; they are a ‘costume’ used in a performance
Cosmetic and medical expenses - if, as a performer, you are able to show that expenses for cosmetic surgery have been incurred solely for professional purposes, then the expenses may be allowed for tax. It would be useful in this scenario if you had as much evidence as possible to show that the expenses were for your business - having letters and emails from agents, casting directors to explain why the procedures were required and that without them you would be losing work
Travel – you are allowed to claim all costs of overnight travel (flights, Uber, trains, buses/coaches, hotels, Airbnb, tips, dry-cleaning and laundry). For local travel, you can include trips to casting, auditions, performances, acting classes and other direct business appointments. If you do have a role and need to travel on a regular basis, HMRC will only allow this if it is temporary - if you travel to the same venue for no more than 24 months
Meals – for overnight trips, you are fine to claim for meals (subsistence). You can also claim if you need to travel for business matters and it is not a place you visit on a regular basis - somewhere that you visit once or on an occasional basis. If you are on the road, HMRC does have a per diem allowance that can be useful if you are not great at keeping receipts/records
Vehicle expenses – you can either claim for mileage, where you keep a record of the distances for work, or you can claim actual costs of using the vehicle and you will need to have records of the cost of the vehicle, gas, repairs and insurance. For mileage, for the first 10,000 miles, you can claim 45p per mile for cars, 24p for motor cycles and 20p for bicycles
Research – actors need to keep up with the industry and you can claim for film and play tickets, Netflix, HBO, Apple TV and other streaming services
Subscriptions – union dues (e.g. if you are a member of Equity), magazines, journals, online sites such as Backstage and Spotlight
Legal and professional fees – lawyers, accountants and other professionals
Equipment – this covers any physical item that has a life of more than one year, normally a laptop, iPad, phone, video and sound equipment
Phone and internet costs - for your phone, either 100% if you have a dedicated phone, or a proportion if you just have one you use as a mix for business and personal calls
Marketing - headshots and showreels
Use of home – the main rule is that you must have a room (or rooms) that you use exclusively to work from home. You can claim mortgage interest, rent, gas, water, electricity, council taxes, insurance and repairs. To calculate the percentage of those costs to claim, you look at the square foot of the work area and compare that to the total square foot of the property.
Payments on account for ACTOR taxes
If the tax on your self-employed income is more than £1,000, HMRC will ask you to make payments on account for the next tax year.
These 2 payments are each 50% of the tax due for the year before.
So, for 2019/20 if your tax is more than £1,000 on your final tax return, that tax will be due on the 31 January 2021 - you will also need to make the payments below:
50% of the final tax for 2019/20 in advance for 2020/21 on 31 January 2021
50% of the final tax for 2019/20 in advance for 2020/21 on 31 July 2021
The problem for many people is the first year for paying payments on account. If you leave filing the 2019/20 tax return close to the deadline, for cashflow this could be an issue as you will need to pay for 2019/20 but then also 50% for the next tax year at the same time.
UK tax year and important dates
The last UK tax year ran from 6 April 2019 to 5 April 2020 - with the online tax return and any final taxes due by 31 January 2021.
If you do need to make payments on account for 2019/20, the dates for payment:
50% on 31 January 2020
50% on 31 July 2020
You do have the option to file a paper tax return and post this to HMRC - there is an earlier deadline of 31 October 2020.
Any questions
We are very happy to help with any actor tax questions and we can run through how to file your actor tax return.
Our friendly team of qualified tax advisers and actor accountants have specialised actor tax preparation experience to help actors and other entertainment industry professionals in London across the UK and walk you through what the next steps are – contact us today.