If you’re a singer, artist, influencer, or performer (a creative) making money from your creative work, it’s time to think about accounting. It might not be the most exciting part of your career, but keeping your finances in order means less stress, fewer tax surprises, and more money in your pocket.
Whether you're just starting out or earning a steady income, understanding the basics of income, expenses, tax, and financial tracking will help you stay on top of your money.
1. Do You Need to Do Your Own Accounting?
If you’re earning money from your creative work—even if it’s just a side income—you need to track your finances and report it to HMRC. You’ll need to register for Self-Assessment if:
You earn more than £1,000 per year from self-employment.
You receive payments for gigs, commissions, sponsorships, or royalties.
You sell merchandise, digital products, or offer services like coaching or teaching.
Even if you have a PAYE job alongside your creative work, you still need to report self-employed income separately.
2. Tracking Your Income and Expenses
One of the biggest mistakes creatives make is not tracking their money properly. Without good records, you risk missing tax deductions, misreporting income, and overpaying tax.
How to Track Your Income:
Keep a record of every payment you receive, whether it’s from gigs, streaming platforms, brand deals, or merchandise sales.
Store invoices, contracts, and payment confirmations.
If you receive cash payments, record them in a spreadsheet or accounting software.
How to Track Your Expenses:
Save receipts for anything work-related, such as equipment, marketing, travel, and software.
Use a business bank account to keep personal and work money separate.
Log expenses as you go to avoid last-minute tax season panic.
Apps like QuickBooks, FreeAgent, and Xero can automate income and expense tracking, making life much easier.
3. Allowable Expenses: What Can You Deduct?
You don’t pay tax on all your earnings—you only pay tax on profits after expenses. That means if you spend money to run your creative business, you can deduct those costs from your taxable income.
Some common allowable expenses include:
Equipment – Microphones, instruments, cameras, editing software, lighting.
Work-related travel – Train tickets, mileage for gigs, accommodation.
Marketing – Website hosting, social media ads, promo materials.
Studio & workspace costs – Venue hire, home office expenses.
Training – Music lessons, workshops, online courses.
Professional services – Accountants, legal fees, PRS/PPL membership.
Only business-related expenses are deductible—personal spending doesn’t count.
4. How Tax Works for Creatives
The UK tax year runs from 6 April to 5 April, and if you’re self-employed, you must submit a Self-Assessment tax return by 31 January.
Taxes you may need to pay:
Income Tax – If you earn over £12,570 per year, you pay tax on anything above that threshold.
National Insurance – Class 2 (£3.45 per week if earnings are over £12,570) and Class 4 (9% on profits above £12,570).
VAT – If you earn over £90,000 per year, you must register for VAT.
Tip: Set aside 20–30% of your earnings for tax so you’re not caught off guard.
5. Invoicing and Getting Paid on Time
If you’re working with clients, venues, or brands, you’ll often need to send invoices to get paid. A good invoice should include:
Your name or business name.
Invoice number and date.
Client’s name and address.
A breakdown of services provided and costs.
Payment details (bank account, PayPal, etc.).
Due date (typically 14 or 30 days).
To avoid late payments:
Send invoices as soon as possible.
Follow up politely if a client is late paying.
Use invoicing software like Wave, QuickBooks, or FreeAgent to send and track invoices.
6. Should You Hire an Accountant?
If you’re just starting out, you might be able to manage your accounts yourself. But if you:
Earn more than £30,000 per year,
Have multiple income sources (streaming, royalties, sponsorships, merch),
Deal with foreign income or VAT,
…it might be worth hiring an accountant (like us!) to help you save time, avoid mistakes, and reduce your tax bill.
7. The Best Accounting Tools for Creatives
If managing money feels overwhelming, accounting software can make things easier. Some of the best tools include:
QuickBooks – Best for automatic tax tracking and invoicing.
FreeAgent – Great for freelancers, with built-in tax return features.
Xero – Ideal for growing businesses with multiple revenue streams.
Wave – Free invoicing and expense tracking for small-scale freelancers.
Many of these tools can connect to your bank account, making it easier to track income and expenses in real time.
Final Thoughts: Stay Organised, Save Money
Accounting doesn’t have to be stressful—a little organisation goes a long way. If you:
Track your income and expenses,
Claim all allowable expenses,
Set aside money for tax
…you’ll avoid last-minute panic and keep more of what you earn.
If you’re unsure about anything, HMRC has online resources, or you can ask an accountant for help. The key is to stay ahead of your finances, so you can focus on your creativity without money worries.
If you're ever in need of help with setting up a limited company, sorting out your bookkeeping, accounting and tax submissions or would like some personal financial coaching, drop us a line by clicking on the 'Contact Us' button at the top of the page and we'll be happy to help.
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