I have a colleague who has almost finished developing a website that introduces part-time/developing musiscians to industry professionals. The website allows a basic music track to be uploaded and the client chooses from a roster of guitarists/keyboard players/singers etc to play on the track. My colleague then produces the finished result so that a professional production is the achieved. The musicians get a cut of the fee.
My question is, once the business reached the VAT turnover limit, is the service provided one that attracts VAT at 20%? If the musicians involved are VAT-registered will they in turn have to invoice my colleague for their fee + VAT?
Replies (8)
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Your friend should visit gov.uk and follow the links to Business and self-employed. There is a reasonably straightforward beginners guide to VAT that should answer most of his questions.
S/he may find it best to hire an accountant who will also be able assist with the income tax.
I have a friend who make his living giving professional accounting and tax advice.
My question is, why is a music website worth paying for but professional advice isn't?
Accountant A wrote:
I have a friend who make his living giving professional accounting and tax advice.
My question is, why is a music website worth paying for but professional advice isn't?
He is actually about to engage a professional accountant. I suggested he finds one with knowledge and experience of the music industry. Thought about asking on this forum, but after your reply I will suggest he tries a music forum where he has a chance of a friendly and useful response...
Useful? Maybe. I doubt it.
Not that many musicians are VAT registered. That is because the limit for being required to register for vat is a turnover of £85,000. It is really quite difficult to earn enough as a self-employed musician to hit that threshold.
I will suggest he tries a music forum where he has a chance of a friendly and useful response...
Excellent idea! I understand there are many talented musician VAT experts. Good luck!
Excellent idea! I understand there are many talented musician VAT experts. Good luck!
Oddly enough I am expecting to get more income this year as a musician than from VAT MTD services (because I am not charging for my MTD services).