|
|
All Accounted For
by Kevin Gallagher
I would guess that most magicians keep a simple accounts book which keeps a note
of all incomings and all outgoings to be accounted for on the dreaded tax return
but I offer here a strong monitory tip. Use an accountant.
I use an accounts software package which provides good visibility and reporting
and for many years, I simply managed my own accounts unaided. This entailed
recording any payments received together with any costs and all seemed very
straight forward. A few years ago, uncertain about a particular aspect, I
decided to take a consultation from a professional accountant at the cost of
several hundred pounds. I have never looked back. Each year, I now take a single
consultation after I have prepared my accounts for return for his approval.
Suffice to say, each year he has paid for his fee several fold. He is able to do
this because accounts are his profession and as such, he takes it upon himself
to understand all of the implications of the apparently minor details which crop
up in each budget which generally pass straight over my head.
By way of example, did you know that as a benefit to small businesses this tax
year, it is permissible to write down one hundred percent of all capital
purchases involving computer or IT equipment. This extends not only to computers
but to all associated equipment, like for example, my new invaluable digital
camera, purchased exclusively for magic. One of the things that used to be
irritating about hi-tech equipment which is now more tolerable is that it can be
depreciated at an astonishing rate as it too quickly becomes obsolete to
legitimately disappear from the books in but a few years.
Car benefits are incredibly complex and there are a number of different ways in
which travel may be accounted. If your business is healthy enough, you may be
able to purchase or lease a car through it so that insurance, tax, servicing,
depreciation and the like become a business rather than personal expense. In my
own circumstances, this is not the case and I claim a mileage allowance against
each consultation, visit to a potential client or booking. Many magicians that I
have talked to have been very surprised to learn that the accepted allowances
are 45p for the first 4000 miles and 25p per mile thereafter for cars ranged
from 1500 to 2000cc. This rises to an astounding 63p and 36p for cars over
2000cc which can mean in some favourable cases, you could actually be better off
driving that nice larger car! Again, I know of some magicians that do little
more than claim back petrol at cost.
Every single magic expense can be written down including society memberships,
conventions, books, videos, accommodation and sustenance, dry cleaning and not
just props and outfits which first come to mind. This is not trying to cheat the
taxman, they are very legitimate allowances. For each show, you can claim for
all of those consumables so go on, for your own entertainment if nothing else,
get that waffle dust accounted for!
© Kevin Gallagher January 2003