Do I need to be registered self-employed?
In the UK people are expected to contribute to the overall economy and management of the country by paying taxes. Most tax is included in the cost of the things we buy, but we also pay tax on any money we earn (income tax). This is used to fund essential services which we all benefit from, such as highway maintenance, policing, education and the NHS. We also pay National Insurance (NI) contributions which are used to fund benefits for people on a low income, or unable to work, as well as our state pensions.
If you work for an employer you generally don't have to worry about your income tax as the company you work for will inform HMRC and your tax will be deducted from your pay. You see this on your payslip - the amount you got paid before tax (gross income) and the amount you actually received in your bank account (net income).
But when you become an actor, you are no longer working for one company. You are working for whoever will employ you and that will most likely be for a short term engagement. It would be extremely difficult for small organisations, like theatre companies, to set people up as employees for a short period of time so they hire you as self-employed. This means they will be paying you your full pay (gross income) and will expect you to calculate any tax or NI contributions you are due to pay.
This means you need to register as self-employed and keep accurate records of any money you earn as a performer as you will need to submit a self-assessment every year.
You can still be in regular employment and be self-employed. As part of your self-assessment you will need to provide details of any employed work, as well as income generated through self-employment. You can earn a certain amount each year before you have to pay tax; when you first start out, you are probably going to be well below the threshold for paying tax, but even if you are not earning much, it is recommended that make voluntary NI contributions to ensure you will have something to draw on when you need it.
Managing your finances can seem quite daunting, but it really doesn't have to be. All you need to do is keep accurate records of everything you earn, or spend, in direct relation to your self-employed work. If you do this from the start, you will not have any problems when it comes to the end of the financial year and need to complete your self-assessment. You can find out more regarding self-employment at Gov.UK. There is also lots of helpful information out there on what you can claim as tax-deductible (such as this guide from Performance Accountancy) and you can always contact us at the agency for help and advice, rather than spending money on hiring an accountant (probably not worth it until you are genuinely making enough money from performing to say it is your main income stream).
Remember; you are responsible for your finances, not us. We are not obliged to check if you are registered as self-employed and expect all our clients to record their earnings and declare them to HMRC in accordance with the law.
So, if you haven't done so already, register for self-assessment today!
