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Paying musicians

Hi,

Client of mine works as a musician and often gets paid in cash. From the cash income that he receives he often has to pay his fellow musicians so I was wondering what the easiest method of paying his fellow musicians?

I was thinking of suggesting that everytime he pays someone in cash that he gets them to sign a receipt saying that they have received the cash and that they are responsible for their own tax affairs.

Would this be sufficient or are there any other suggestions?

Thanks

Matt

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avatar
25th Feb 2013 10:55

Bank Transfer

Pay them by BACS - much easier to prove. Of course it will delay the payment to the musicians but only by a day or two.

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25th Feb 2013 11:00

Faster payment?

I'm not sure they will be happy though!

Getting a receipt seems the best course of action.

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avatar
25th Feb 2013 11:11

and/or

at least getting details of the band name, or individuals and the respective address (which presumably will be easy to get given they will probably only take people they know.  Just as much info on the individuals as possible.

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By Glennzy
25th Feb 2013 13:40

I Do a lot in the lesiure industry and it is a problem.

I look after a few bars, clubs and restaurants who have DJ's and entertainers and this is a standard thing which I am suprised goes on to the level it does.

I advised my client to write cheques for each person at the start of week and leave them in his safe, instructing his duty manager to only issue the cheques on presentation of a suitable invocie for the work done. Several of the entertainers refused to do this as it would take a week for Chq to clear and left refusing to come back unless paid cash. My client then offered to pay a weekly bacs payment again on presentation of invoice which again they would not accept and would only work for cash. As my client was losing revenue (as his Dj's were working in rival bars who paid cash no question asked) he has relented and has agreed to pay cash when giving an invoice. I suspect this leaves him open to problems in the future as whilst they are giving invoices I question if all of the income if any is declared to HMRC. I even offered to do the SA returns of the individuals involved for £100 each which again was met with Zero up take confirming my suspicians. We have therefore issued them all with a contract which confirms they deal with their own tax affairs etc which they have reluctantly signed. Whilst I feel my client cannot do much more I feel HMRC will look differently at it.

there are other things you need to consider.

Is someone is your house band/entertainer (and dont work much anywhere else) should they be employed under PAYE?

If a DJ is paid £400 for a 2 hour set and works elsewhere should he be VAT registered?

If you are paying a band and they distribute the money amongst themselves should they be registered as a partnership  or as individual artists.

The whole thing is a mine field and the difference with what HMRC expect and standard business practice in the industry is huge.

All you can do is document your best efforts that you have tried to keep  your clients system as tight as possible. These businesses are regulars for aspect inquiries so make sure your client is aware of bookkeeping obligations.

 

 

 

 

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