Tax tips for actors: self-assessment, allowable expenses, and Making Tax Digital explained by an industry expert.
In this essential The Spotlight Podcast episode for every working performer, we sit down with Mark Carr, a Chartered Accountant and Director at Streets. Mark has over two decades of experience helping those in the media and entertainment industry – particularly actors and agencies – navigate their finances, making him an expert on the unique, often fluctuating income streams of a freelance performing career.
Whether you’re new to the industry or a seasoned professional, this episode is packed with practical, timely advice you need to run your acting career as a successful business.
Tune in to learn:
- How to register as self-employed and the steps for the Self-Assessment process.
- The difference between registering as a Sole Trader versus setting up a Limited Company, and which might be right for your income level.
- The golden rule for keeping track of your finances and Mark’s advice on common mistakes.
- A detailed breakdown of allowable expenses for performers – from your Spotlight membership, travel and training to surprising claims like cosmetic work – and what you absolutely cannot claim.
- Everything you need to know about the forthcoming shift to Making Tax Digital (MTD) and how to prepare for it now.
Listen to this essential episode of The Spotlight Podcast and ensure you meet the January deadline, minimise your tax bill, and stay on the right side of HMRC.
Take a listen:
Key Takeaways for Performers on Tax and Self-Employment
Self-Assessment Tips
- The tax year runs from 6 April to 5 April. The online filing and payment deadline is 31 January following the end of the tax year.
- Set money aside: Due to the unpredictable nature of income, it’s vital to set money aside throughout the year to cover your eventual tax bill and avoid penalties and interest.
- Income reporting: A major mistake is recording income net of agent commission. You must always gross up the commission (report the full amount before the agent’s cut) to correctly calculate your tax and monitor the VAT threshold.
- VAT: Compulsory registration is required if your turnover exceeds £90,000 in any rolling 12-month period. If you’re VAT registered, always set aside 20% of your income, as the VAT funds may arrive after the initial payment, but the tax is due sooner.
- Keep records: I’d strongly recommend using a separate bank account for business transactions and, if you can afford it, to invest in cloud accounting software (like Xero or QuickBooks) to link transactions and track finances digitally.
Registering as Self-employed
- Registering: To register as self-employed, go to the HMRC website to set up a personal tax account and register for Self-Employment to receive your Unique Taxpayer Reference (UTR).
- Limited company: Setting up a limited company is typically only tax-effective if you are earning consistently above £50,000 and are well-organised, as it allows you to control the timing of income distribution (dividends) to manage tax bands.
Allowable Expenses: The Golden Rule
- An expense is allowable if it is “wholly and exclusively” for the purpose of trade.
- The golden rule is to always keep your receipts. Lack of receipts makes it harder to justify a claim and gives HMRC grounds to disallow it.
- Duality: If an expense has a dual purpose (personal and business), it is generally not allowable.
- Example: Combining a business trip (e.g. meeting a director) with a holiday means the flight is non-deductible.
- Allowable expenses examples: Agent commission, accountancy fees, Spotlight membership, Equity subscription, equipment (laptops, home recording gear), travel to auditions/jobs, subsistence (food) when away from home on a job, and research (movies, theatre tickets directly related to your work).
- Unique claims: Costs for things like cosmetic dentistry or gym membership may be allowable only if they are specifically required for a particular role and are over and above your normal routine.
- Non-allowable expenses examples: General entertaining (taking an agent or director out for a meal) is not tax-deductible. Everyday clothing or cosmetics are also generally disallowed due to duality.
Making Tax Digital (MTD) for Income Tax Self-Assessment
- MTD will be mandatory from 6 April for those with an income of £50,000 or over. From 6 April 2027, the threshold drops to those earning £30,000 and over.
- MTD requires you to use compatible digital software (like Xero, QuickBooks, FreeAgent, etc.) and to submit income and expenditure data to HMRC four times a year on a quarterly basis.
- One benefit of MTD is it will provide you with an ongoing picture of your estimated tax liability, helping you avoid a large, unexpected bill in January.
Other Important Points
- Career breaks: If you’re taking a career break but intend to return to acting, it could be beneficial to keep your self-assessment open and file a return (even if income is zero) to claim a small loss for ongoing expenses (like Spotlight fees), which can be offset against future income.
- Inability to pay: If you cannot pay your tax bill, always contact HMRC immediately to explain your situation and arrange a payment agreement. Do not ignore it.
