End of cash in hand for gigs?

[thebrig]

[quote name='the boy' timestamp='1499942693' post='3334671']
Pubs no longer have pots of cash after a nights takings any more. Contactless and regular card payments mean that their intake of money is only about 15% cash. Most of their takings now are visible to hmrc because of this so it's no longer an advantage to pay for anything in cash. Whereas before they had pots of cash and were desperate to pay with anything they could with it rather than declare it.

It's a cultural thing People in general are moving away from cash. Also, if done by bank transfer it is visible to hmrc and a portion can be written off. Finally if paid midweek or at the end of the month it can be reviewed by a manager and processed in a sober fashion.
[/quote]I don't know what type of pubs you drink in, but I am now retired and I drink in a number of different pubs most days of the week, and I can honestly say that someone paying for their drinks by card is still very rare, by your reckoning, for every £1000 the pub takes, it has only taken £150 in cash, I'd be very surprised if that was the case.

It might be the case in the carvery/restaurant type "pubs" that happens to sell alcohol as well, because people are ordering meals along with their drinks and they usually pay all in one go, but they are not usually the type of "pubs" that have live music.

I'm not sure where you got your information from, but a number of my friends are pub landlords/managers, and I know for a fact that most people still use cash to pay for their drinks.

[dudewheresmybass]

The vast majority of my work is cash in hand.
I declare all of it- so it is all liable to tax.
Paying cash in hand doesn't mean that it exists outside of the standard system, it just relies on the honesty of the person receiving it

[Marvin]

If you get paid for gigs around here it's cash...and you pay for your ale with cash as well. Paying for ale with a card is rare to the point you'd probably be asked by the bar staff "what do you want me to do with this?" 😎

[TimR]

The pub will have cash in the till.

I'm guessing the issue would be how the landlord takes that cash out of the till to pay you.

All the cash going over the bar will be accounted for and put into the till as everything is electronically ringed up and has to balance at the end of the evening. Unless staff are pouring drinks for free and pocketing the cash. In which case the stock levels will reduce quicker than the till receipts increase. In a tied house the brewery will notice. In a free house or part free/part tied house there would be a bit more freedom on the beer side.

Ultimately the person paying you could easily take £250 out of the till and give you £150 and pocket the change.

.

Edited July 14, 2017 by TimR

[gjones]

My old band got offered a gig at the HMRC fraud team's Christmas party.

I kid you not.

We made our excuses and wriggled out of it.

I wonder if they would have paid us in cash?

[Monkey Steve]

I was reading a legal briefing at work this morning (my job is just that interesting) around a new offence coming in the Autumn where companies will be liable for potentially unlimited fines if their employees assist in any criminal tax fraud, however loosely.

This isn't aimed at pubs paying musicians in cash, it's designed to help with the high profile stuff like Jimmy Carr and footballers' image rights, by going after any tax advisers who recommend these types of schemes, but the drafting would cover any situations where cash is paid to an individual who does not then correctly declare it for tax and NI (which is criminal tax fraud).

While in isolation I'd be very surprised if HMRC went after pubs paying musicians in cash (as others have said, that's not really a big tax evasion issue) it does neatly link to the Taylor Review's view on the "hidden economy" (i.e. cash in hand payments that never get declared) and the guidance around it is all about companies analysing where there are risks that their employees might be doing something that helps somebody else avoid tax. In this case the cash payments might be seen as feeding the hidden economy, and the Companies (pubs, venues, etc) might put a stop to it not because HMRC care, but because it gets flagged as a potential risk if HMRC do decide to care about it at some point in the future.

[taunton-hobbit]

From my experience, an awful lot of entertainers do not earn that much - HMRC has a load of discretion when it comes to a 'paid hobby'.
Any local accountant would offer a free initial briefing...........

[Marc S]

[quote name='gjones' timestamp='1500034913' post='3335264']
My old band got offered a gig at the HMRC fraud team's Christmas party.

I kid you not.

We made our excuses and wriggled out of it.

I wonder if they would have paid us in cash?
[/quote]

Like flies steering clear of the web eh? lol
I wonder whether they got a band for that function?

[ambient]

They obviously can't stop people paying cash at private parties, weddings, birthdays, bar mitzvahs etc.

[TimR]

Taken in isolation per band per gig, it's not a lot.

If you were a pub though £250 a week works out at £13k, potentially £2k-£5k per year per venue on unpaid taxes. Scale that up to brewery level...

Assuming they're not engaging hobby bands of course.

But while it's all cash, there are no checks and balances in place.

[Al Krow]

[quote name='Jus Lukin' timestamp='1499856058' post='3334052']
Popped up while I was typing. Being paid cash is fine, it's the refusal to accept invoices which makes it hard. And I play up to five gigs a week, with no other income, all local venues this year. I can invoice a couple pubs and a handful of weddings, but HMRC might like to know how I got by for '17-'18. Telling them it was all cash, and giving them a record of it all which I wrote down myself might not get brushed off quite so smoothly. Maybe there's more provision for earning cash out of the landlords pocket than I thought, but I would still welcome a more invoice friendly system.
[/quote]
[quote name='TimR' timestamp='1499856733' post='3334060']
I didn't think you could get a tax rebate if it was your hobby. If you can then I'm going to claim a tax rebate for all the things I buy to enable me to race. All that's required is a diary showing gigs and payments and recipts of all your outgoings. I think you can even claim for mileage to and from rehearsals, MP3 downloads, and any other 'equipment', but only against offsetting payments for gigging to demonstrate that it's a hobby. You can't offset the loss you make against your day job taxes unless you're a self employed full time musician of course and then you're actively trying to make a profit.
[/quote]

Ok I'm gonna stick my neck out here and offer some free tax tips (on a "non reliance" basis in case any of you decide you want to sue me!)

Two situations:

[b]Pro / Semi-pro musicians [/b]
If making music is how you make a living (e.g. Jus Lukin'), it's a "business" and the [b]profit[/b] that you make is potentially taxable. But profit isn't the gross income you get from gigs - you should also deduct all reasonable costs relating to your music business (e.g. car mileage allowance, studio rehearsal hire and even the cost of your gear should be eligible for "capital allowances") from your gigging income to arrive at the profit figure. The other point is that your music business profit (and it may indeed be a loss, once you have taken off costs) plus any other income from other sources that you receive needs to be > £11,500 (the tax free personal allowance) in 2017/18 before you have to pay any income tax (there is a separate point relating to NI).

(If your music business turnover is > £83,000 then you will also need to register for VAT, but I assume that is not going to be an issue for 99.9% of us on here and I suspect you will already have a decent accountant in those circumstances).

[b]The rest of us - hobbyists[/b]
If our gigging is "just for fun" i.e. a hobby and we get paid a bit as we are going along, then it's not taxable (and nor can you claim losses). This will often be the case where we have a separate full time job and gigging money is a nice to have bit of "pocket" / "beer" money. You don't even need to worry about keeping records in these circumstances.

There can be a grey area when a hobby becomes something more serious that is being done commercially with a view to making a profit / living from it (or making a decent contribution to a living). At that point it's worth having an informal chat with either HMRC or your local accountant.

My two bands, after a few years together, are getting to the stage where we are managing to more than cover our costs, but I'm very relaxed that it is still a hobby for most of the band members. And if HMRC ever decided that I was at risk of making a taxable profit, well I'd probably just spend ("waste"??) money on a Warwick SS2 bubinga, a Rickenbacker 4003, an Ibanez SR1800, a Vanderklay 210 (or maybe a BF cab) and a ridiculously nice amp head [TBA] (oh yes and a decent compressor pedal to keep Cuzzie happy) and claim capital allowances on the lot to turn my profit into a loss which I could carry forward to later tax years to offset any profits, for the forseeable future...

Hope this summary is of some use to some of my fellow BCs...

Edited July 14, 2017 by Al Krow

[Monkey Steve]

[quote name='ambient' timestamp='1500044803' post='3335347']
They obviously can't stop people paying cash at private parties, weddings, birthdays, bar mitzvahs etc.
[/quote]

no, and (in light of my earlier post) I don't see it as a push from HMRC to stop musicians getting paid in cash, but rather that companies (pubs and clubs, etc) will overreact to be on the safe side.

[blue]

[quote name='TimR' timestamp='1499810611' post='3333846']


This is where you have to start being careful. It's one thing getting paid £50 into your bank account for each gig. Once you start getting all the bands money paid directly to you and then start paying it out, it can start to look like something else.

Ultimately the HMRC aren't interested in chasing bands for money. It costs them more than they'd receive.
[/quote]

Agreed,

Not sure how it works for you guys.

Over here "the man" does not play.

If he wants your money he's going to come after you like gangbusters and you will lose.

Blue

Edited July 14, 2017 by blue

[SpondonBassed]

[quote name='dudewheresmybass' timestamp='1500019363' post='3335122']
The vast majority of my work is cash in hand.
I declare all of it- so it is all liable to tax.
Paying cash in hand doesn't mean that it exists outside of the standard system, it just relies on the honesty of the person receiving it
[/quote]

It needed saying. Thanks for standing up for those of us who believe in paying our way in life.

Tax avoidance is a separate issue.

[the boy]

[quote name='thebrig' timestamp='1500018798' post='3335114']
I don't know what type of pubs you drink in, but I am now retired and I drink in a number of different pubs most days of the week, and I can honestly say that someone paying for their drinks by card is still very rare, by your reckoning, for every £1000 the pub takes, it has only taken £150 in cash, I'd be very surprised if that was the case.

It might be the case in the carvery/restaurant type "pubs" that happens to sell alcohol as well, because people are ordering meals along with their drinks and they usually pay all in one go, but they are not usually the type of "pubs" that have live music.

I'm not sure where you got your information from, but a number of my friends are pub landlords/managers, and I know for a fact that most people still use cash to pay for their drinks.
[/quote]
I think it's a generation thing. I go for a few quiet pints during the week with a mate of mine. He's nearly 60 and cash is king with him and the pubs we go to. I'll pop to a different pub with my missus for lunch and invariably we pay by card. If I take the young lads from work out for a few drinks not one of them will have cash. They will all pay by card. They won't even pay for their taxis home by cash. I read that figure of 15% somewhere. It may not be correct across the board.

[TimR]

The other point is that pubs will prefer to take cards. They're paying something like 0.2% on their transactions. Compared with 0.4% when banking cash.

[stingrayPete1977]

I feel it only my duty to warn anyone from the south heading north or at least out into the sticks over the summer to bring some cash with them, unless you stumble across a Harvester or Wetherspoons etc I strongly suggest you bring some folding cash along! On the plus side a pint will taste better and cost half as much so it's not all bad news

[arthurhenry]

[quote name='Al Krow' timestamp='1500047317' post='3335373']
Ok I'm gonna stick my neck out here and offer some free tax tips (on a "non reliance" basis in case any of you decide you want to sue me!)

Two situations:

[b]Pro / Semi-pro musicians [/b]
If making music is how you make a living (e.g. Jus Lukin'), it's a "business" and the [b]profit[/b] that you make is potentially taxable. But profit isn't the gross income you get from gigs - you should also deduct all reasonable costs relating to your music business (e.g. car mileage allowance, studio rehearsal hire and even the cost of your gear should be eligible for "capital allowances") from your gigging income to arrive at the profit figure. The other point is that your music business profit (and it may indeed be a loss, once you have taken off costs) plus any other income from other sources that you receive needs to be > £11,500 (the tax free personal allowance) in 2017/18 before you have to pay any income tax (there is a separate point relating to NI).

(If your music business turnover is > £83,000 then you will also need to register for VAT, but I assume that is not going to be an issue for 99.9% of us on here and I suspect you will already have a decent accountant in those circumstances).

[b]The rest of us - hobbyists[/b]
If our gigging is "just for fun" i.e. a hobby and we get paid a bit as we are going along, then it's not taxable (and nor can you claim losses). This will often be the case where we have a separate full time job and gigging money is a nice to have bit of "pocket" / "beer" money. You don't even need to worry about keeping records in these circumstances.

There can be a grey area when a hobby becomes something more serious that is being done commercially with a view to making a profit / living from it (or making a decent contribution to a living). At that point it's worth having an informal chat with either HMRC or your local accountant.

My two bands, after a few years together, are getting to the stage where we are managing to more than cover our costs, but I'm very relaxed that it is still a hobby for most of the band members. And if HMRC ever decided that I was at risk of making a taxable profit, well I'd probably just spend ("waste"??) money on a Warwick SS2 bubinga, a Rickenbacker 4003, an Ibanez SR1800, a Vanderklay 210 (or maybe a BF cab) and a ridiculously nice amp head [TBA] (oh yes and a decent compressor pedal to keep Cuzzie happy) and claim capital allowances on the lot to turn my profit into a loss which I could carry forward to later tax years to offset any profits, for the forseeable future...

Hope this summary is of some use to some of my fellow BCs...
[/quote]
If you do other self-employed work though, any musical income, however small, should also be included and records kept etc. This also means that any losses you make from music can be written off against all your other income. Also, a player may only be making "pocket money" from gigs, but their intention might be to make it a profitable business, which may, or may not ever happen.

[SpondonBassed]

[quote name='stingrayPete1977' timestamp='1500119250' post='3335729']
I feel it only my duty to warn anyone from the south heading north or at least out into the sticks over the summer to bring some cash with them, unless you stumble across a Harvester or Wetherspoons etc I strongly suggest you bring some folding cash along! On the plus side a pint will taste better and cost half as much so it's not all bad news
[/quote]

Aw Pete!

Now those pesky Lahndahgnaws are going to be able to survive out here longer because of your wisdom. Wind your neck in mate.









Heeheehee

[Al Krow]

[quote name='arthurhenry' timestamp='1500128455' post='3335799']
If you do other self-employed work though, any musical income, however small, should also be included and records kept etc. This also means that any losses you make from music can be written off against all your other income. Also, a player may only be making "pocket money" from gigs, but their intention might be to make it a profitable business, which may, or may not ever happen.
[/quote]

Agree with the second part of your statement but not the first.
Intention is key in both situations, IMHO, so if your music is genuinely a hobby, it's a hobby regardless of whether you are an employee or self employed.
And without wishing to get too technical, even if your expressed intention is for this to be a business and not a hobby, if you're regularly making a loss, and have never made a profit, you will need to demonstrate that you are approaching matters commercially and that there is a possibility of making a profit e.g. backed up by a business plan. Otherwise it is not an "adventure in the nature of a trade with a view to making a profit".
Obviously, if in doubt, please speak to HMRC or your local accountant.

Edited July 15, 2017 by Al Krow

[arthurhenry]

[quote name='Al Krow' timestamp='1500131696' post='3335825']
Agree with the second part of your statement but not the first.
Intention is key in both situations, IMHO, so if your music is genuinely a hobby, it's a hobby regardless of whether you are an employee or self employed.
And without wishing to get too technical, even if your expressed intention is for this to be a business and not a hobby, if you're regularly making a loss, and have never made a profit, you will need to demonstrate that you are approaching matters commercially and that there is a possibility of making a profit e.g. backed up by a business plan. Otherwise it is not an "adventure in the nature of a trade with a view to making a profit".
Obviously, if in doubt, please speak to HMRC or your local accountant.
[/quote]
If, say you make 95% of your income from a self employed business and 5% from music, surely you can't just not include the music income and claim it's only a hobby.

[peteb]

[quote name='arthurhenry' timestamp='1500132484' post='3335833']

If, say you make 95% of your income from a self employed business and 5% from music, surely you can't just not include the music income and claim it's only a hobby.
[/quote]
Why not? Surely a hobby is a still a hobby regardless of whether your main source of income is a result of being self-employed or working for someone else.

[Al Krow]

[quote name='arthurhenry' timestamp='1500132484' post='3335833']
If, say you make 95% of your income from a self employed business and 5% from music, surely you can't just not include the music income and claim it's only a hobby.
[/quote]

The 5% figure you mention is interesting as its often used by HMRC themselves when considering whether something is material or not and for me is a "sign post" that this may be more than a hobby.

So if your music [i]profits[/i] (after deducting all relevant costs) are regularly 5% or more of your total income (whether this is employed or self employed income doesn't matter), I would agree you should think about getting some proper advice and think about whether you are doing your music commercially with a view to a profit, or it is just a successful hobby.

And remember even if you're doing this commercially you're allowed to deduct a whole bunch of costs in establishing whether it is actually profitable, including your bass, amps and pedals, agents' fees, studio hire costs etc.

There is obviously a grey area where something transitions from being a hobby into a commercial venture and at this margin its important to look at individual facts and circumstances.

[stingrayPete1977]

[quote name='SpondonBassed' timestamp='1500131638' post='3335824']


Aw Pete!

Now those pesky Lahndahgnaws are going to be able to survive out here longer because of your wisdom. Wind your neck in mate.









Heeheehee
[/quote]

Don't worry they won't come this far oop

[arthurhenry]

[quote name='peteb' timestamp='1500134195' post='3335848']
Why not? Surely a hobby is a still a hobby regardless of whether your main source of income is a result of being self-employed or working for someone else.
[/quote]
If you're self employed, all your income from every source has to be declared. It all counts together as one overall income. All expenses can of course be claimed as well.