50% of Self-Employed Artists Pay Too Much in Taxes

30 January 2024

Survey of over 500 self-employed artists reveals that as many as half are overpaying on taxes due to unclaimed deductions for essential expenses.

50% of UK music artists who submit self-assessment tax returns do not log all the tax-deductible expenses they are entitled to.
The most commonly missed tax-deductible expense is music subscriptions, such as Spotify, Apple Music, Mixcloud Pro, Tidal, Bandcamp, and SoundCloud Pro.
Other commonly overlooked potential expenses include studio time, travel to and from shows, and equipment cost and maintenance.
Only 30% of self-employed artists use an accountant, while 25% use accounting apps.
48% of artists surveyed were in debt, 26% worried about money daily.

Coinciding with the Self Assessment tax return deadline on January 31st, Pirate, a leader in global music studio networks, has released new research into the financial management of self-employed music artists in the UK. The study, which surveyed over 500 bands, producers, DJs, and live performers, reveals that 50% of artists might be paying more taxes than necessary.

The survey indicates that a significant number of artists do not fully utilise tax-deductible expenses when completing their self-assessment tax returns, potentially impacting their wellbeing. Pirate reports that essential expenses such as music subscription services, studio time, and travel costs are often overlooked. Although the majority of artists incur these expenses, many fail to record and claim these costs on their tax returns:

81% of self-employed artists had spent money on music subscriptions, but 61% of those artists did not record this cost for their tax return.
90% incurred expenses on studio time, but 40% of them did not record these costs.
80% spent money on buying or maintaining instruments and equipment, yet 30% of these artists did not record this cost.

Other costs that many artists failed to include in their tax returns included travel to and from performances and auditions, accommodation for shows, costumes, and the cost of producing merchandise. These results suggest widespread confusion among artists regarding what can be expensed on a self-assessment tax return.

The survey has uncovered not only a gap in financial literacy but also a lack of financial stability, making it difficult for artists to outsource this administrative work. 51% of artists surveyed had no savings, with 48% reportedly in debt. 10% of respondents had savings over £10,000. Just 30% of self-employed artists surveyed hire an accountant, and 25% use accounting software or apps.

Looking at how this might be affecting artists’ wellbeing, when asked how often they worry about money, only 4% of artists said never, while 26% said they worry every day. Financial concerns primarily revolve around housing - maintaining rent payments, obtaining or paying off a mortgage, and the cost of bills and food. Being unable to afford cultural activities was also a significant concern. When discussing financial aspirations, 21% aimed to clear debts, 14% to save, another 14% to buy a house, 10% sought more music-focused time, and 6% were working towards affording the essentials like bills, food, and rent.

In response to these findings, Pirate has created a music artists' guide to tax-deductible expenses and is organising a free online workshop to help artists start the new financial year on a better footing. You can look out for details of upcoming workshops on their Artist Hub.

Our Artist Hub is set up to empower artists in their creativity and to support them with all the other work that comes with making music your career. Accounting and taxes aren't what most people dream of when they imagine their music career taking off. In fact, managing your own finances is one of the most intimidating parts of monetising your talents, but it becomes necessary very early on. We want to help artists in our community get a grip on these elements right from the start.

Emmavie Mbongo, Artist and Community Manager, Pirate

The survey also collected advice from artists on balancing creative and financial goals:

Do not save what is left after spending; instead, spend what is left after saving.

Pirate Artist

If you want your creative work to be financially viable, you need to approach it as a job (a very hard one).

Pirate Artist

Do what you are interested in; you only have one life, and you only know roughly how long it will last. It only speeds up from here.

Pirate Artist

Talk to people; money shouldn’t be a taboo subject.

Pirate Artist

Keep the roof over your head; it's no fun playing in the rain.

Pirate Artist

This study was conducted by Pirate, a network of 24-hour Recording, Rehearsal, DJ, Podcast and Dance studios spread across New York, London, Berlin, Los Angeles and beyond, hosting over 365,000 artists. Follow Pirate on Instagram, Twitter, TikTok and LinkedIn.

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