Tax Guide for Musicians and Performers

Being a self-employed musician means juggling gigs, sessions, teaching, and recording — and every one of those income streams needs to be reported to HMRC. The good news is that musicians have some generous expenses they can claim. This guide covers everything you need to know for the 2025/26 tax year.

When Do You Need to Register?

If your total self-employed income from music exceeds £1,000 in the tax year (6 April 2025 to 5 April 2026), you must register as self-employed with HMRC and file a Self Assessment tax return.

Many musicians earn income from multiple sources — live performance, session work, teaching, streaming royalties, PRS payments, and merchandise sales. Add all of these together when working out whether you have crossed the £1,000 threshold.

If you are also employed (for example, by an orchestra, a music school, or a venue), your employment income is handled through PAYE. But your self-employed income still needs to be reported separately through Self Assessment.

Instruments and Equipment: Capital Allowances

This is the big one for musicians. Instruments and professional equipment can cost thousands of pounds, and the tax treatment is important.

Annual Investment Allowance

For the 2025/26 tax year, you can deduct the full cost of qualifying equipment up to £1,000,000 through the Annual Investment Allowance (AIA). This covers:

• Instruments (guitars, keyboards, drums, brass, woodwind, strings)
• Amplifiers and PA equipment
• Microphones and recording equipment
• Music stands and cases
• Computer hardware for recording and production

If you buy a £2,000 guitar for your performance work, you can deduct the entire £2,000 from your taxable profit in the year you buy it.

Repairs and maintenance

Instrument repairs, restringing, servicing, and maintenance are deductible as revenue expenses (not capital allowances). This includes:

• Guitar setups and restrings
• Piano tuning
• Woodwind pad replacements
• Drum skin replacements
• Amplifier repairs

Insurance

Instrument insurance is essential and the premium is fully deductible. If you have an expensive instrument, the insurance alone could be several hundred pounds a year.

Travel to Gigs and Sessions

Travel expenses are often a musician's second-largest deduction after equipment.

The rules

If your home is your business base (which it is for most self-employed musicians), travel from home to gigs, rehearsals, recording sessions, and meetings is a business journey. You can claim:

• Mileage: 45p per mile for the first 10,000 business miles, 25p after that
• Public transport: Train, bus, and tube fares
• Taxis: When necessary for business travel
• Parking: At venues and stations
• Tolls and congestion charges

If you tour and need to stay overnight, you can also claim:

• Hotel or accommodation costs (reasonable amounts — HMRC will question five-star hotels if you are playing pub gigs)
• Meals while travelling away from home overnight (subsistence)

Band vehicles

If you own or lease a van for transporting equipment, you can either claim mileage (45p per mile for cars, 45p for vans) or the actual running costs (fuel, insurance, road tax, servicing) pro-rated for business use.

Agent and Manager Fees

If you have an agent or manager who takes a percentage of your earnings, their commission is a deductible expense. The same applies to booking agents.

Record these carefully — your agent may take their cut before paying you, so your gross income is the full fee before their deduction, and their commission is a separate expense. Both need to appear in your records.

Recording Costs

If you self-produce or pay for recording, the costs are deductible:

• Studio hire
• Engineer and producer fees
• Mixing and mastering costs
• Session musician fees (if you hire others)
• Manufacturing costs for physical media (CDs, vinyl)
• Distribution fees for digital releases (DistroKid, TuneCore, CDBaby)

If you build a home studio, the equipment qualifies for capital allowances as described above. If you dedicate a room to recording, you can also claim the home office proportion of your household costs.

Streaming and Digital Income

Income from Spotify, Apple Music, Amazon Music, YouTube, Bandcamp, and other platforms is taxable. This includes:

• Streaming royalties paid through your distributor
• Direct Bandcamp sales
• YouTube ad revenue from music videos
• Sync licensing fees
• Patreon or membership income from fans

These platforms often pay in irregular amounts throughout the year. Make sure you track every payment. Download statements or CSV reports from each platform at year-end.

PRS for Music and PPL Income

If you are a member of PRS for Music (which collects royalties for songwriters and publishers) or PPL (which collects royalties for performers and record labels), the royalty payments you receive are taxable self-employed income.

PRS and PPL each issue annual statements showing what they have paid you. These are your income records. Note that PRS distributes royalties quarterly, and there is often a lag — you may receive payment in 2025/26 for performances that happened in a previous year. You report income in the tax year you receive it (if you use the cash basis) or when it is earned (if you use the accruals basis). Most sole traders use the cash basis, which is simpler.

Teaching Income

Many musicians supplement their performance income with private teaching. This is self-employed income and should be reported alongside your performance earnings.

Teaching-specific expenses include:

• Sheet music and books purchased for pupils
• Teaching resources and method books
• Travel to pupils' homes (mileage claims)
• Room hire for teaching (if applicable)
• DBS check (if teaching children)

If you teach from home, you can claim home office costs for the hours spent teaching.

Other Deductible Expenses

Clothing and stage wear

Costumes and stage clothing that you would not wear in everyday life are deductible. A tuxedo for orchestral work is borderline — HMRC has historically allowed it for musicians who only wear it for performances. Ordinary clothes, even if you only bought them for gigs, are not deductible.

Music subscriptions and scores

• Sheet music and score purchases
• Music software (Sibelius, Logic Pro, Ableton)
• Plugin and sample library subscriptions
• Streaming subscriptions used for professional research (e.g., studying arrangements)

Strings, reeds, and consumables

Regular consumable items like guitar strings, drum sticks, reeds, valve oil, and rosin are deductible as they arise. No need to capitalise these — just claim them as expenses.

Professional memberships

Membership of the Musicians' Union (MU), the Incorporated Society of Musicians (ISM), or similar bodies is deductible.

Marketing

• Website costs
• Press photos and promotional images
• EPK (Electronic Press Kit) production
• Social media advertising
• Printing costs for posters and flyers

Working Out Your Tax

1. Add up all your music income (gig fees, session fees, teaching, royalties, streaming, merchandise)
2. Subtract your allowable expenses and capital allowances
3. The result is your taxable profit

Apply the £12,570 Personal Allowance, then:

• 20% on profits from £12,571 to £50,270
• 40% from £50,271 to £125,140
• 45% above £125,140

National Insurance:

• Class 2: £3.45 per week (if profits above £12,570)
• Class 4: 6% on profits between £12,570 and £50,270, then 2% above

Irregular Income and Tax Planning

Musicians often have wildly variable income — a great year followed by a quiet one. A few things to consider:

• Payments on Account: If your tax bill exceeds £1,000, HMRC may require advance payments towards next year's tax. If next year's income drops, you can apply to reduce these.
• Pension contributions: In a good year, making pension contributions reduces your taxable income and secures your future. You get tax relief on contributions up to £60,000 or 100% of earnings (whichever is lower).
• Set aside money: Aim to save 25-30% of each payment for tax. Do not spend it all and hope for the best.

Record Keeping

Keep records for at least five years after the filing deadline:

• Gig contracts and invoices
• Royalty statements from PRS, PPL, and distributors
• Receipts for all expenses
• Bank statements
• Mileage logs

With income coming from multiple sources, keeping track of everything can be chaotic. Accounted helps musicians pull their finances together in one place. Penny, the AI bookkeeper, categorises your income streams and expenses automatically, so you are not spending your days off buried in spreadsheets.

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Your job is to make music, not to wrestle with tax returns. Accounted is built for self-employed people who would rather spend their time on their craft. Start your free trial today and let the bookkeeping take care of itself.

Related Reading

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