VAT (Value Added Tax) is a tax levied by the British Government on sales of goods or services in the UK. As a musician offering services for a fee, you may need to register for VAT with HM Revenue and Customs (HMRC). You may also want to register voluntarily. Once registered your services (performances) and goods (e.g. merchandise such as CDs) will be taxable at 20%.
Why register for VAT
- It is compulsory to register if your business’ VAT taxable turnover is more than £85,000. If you're unsure about how much your VAT taxable turnover is, we'd recommend using the HMRC VAT calculator or consulting an accountant.
- You may voluntarily register for VAT provided you are supplying services as a business in the UK.
- Registering for VAT enables you to claim back VAT on a number of business-related expenses such as fuel and subsistence (accommodation and food). Learn more about this here.
- Registering for VAT may also increase your chances of being booked for work as it displays to potential clients that you are serious about making a career in selling your services as a musician.
We recommend reading HMRC and the MU's resources on VAT before making any decisions about registration.
- Apply for VAT registration here: https://www.gov.uk/vat-registration
- The Musicians Union guide to VAT: https://www.musiciansunion.org.uk/Home/Advice/Your-Career/Tax/Value-Added-Tax