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Paying a dep directly from my funds?


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#1 musicalmalc

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Posted 10 July 2019 - 13:43

I am going to be paying a dep 2 or 3 times in the next year to cover some choir rehearsals for me. I only get a nominal payment so receive it in a lump sum at the end of the year and will have to pay deps out of that (probably at 2 or 3x my rate!). All my music is run through a one man band Ltd company as I still haven't made the switch to sole trader (music is not my main job). As it is a side-line and don't have time do a lot of gigs I always make a loss on the music as I have been replacing keyboards, music software and other kit mostly used for playing in the theatre pit therefore I have never had to pay any tax/NI as I haven't paid myself anything except expenses.

 

So, can I just transfer the fee to my dep (haven't found the dep yet but they are likely to be a self-employed musician) and list it as an expense or do I have to account for it in a different way (wasn't planning on dealing with Tax/NI) ?

 

 


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#2 Barry Williams

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Posted 12 July 2019 - 16:04

It is unwise to deal with this through a limited company which has been set up for a different purpose.

 

If you are self-employed at the church, simply pay the deputy from your own funds in full and account for it as a deduction against your self-employed receipts as a musician.  You do not deduct income and NIC as the deputy is not an employee of yours.

 

Very few appointed church organists are self-employed.  See:

 

https://www.churchof...h Music organis

 

 

If you are an employee the cost of a deputy may not be deductible from your taxable receipts.  In those circumstances it is better if the parish pays you less and then pays the deputy directly.  In that way the tax relief is, effectively, given  automatically.

 

Barry Williams

 

Barry Williams


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#3 musicalmalc

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Posted 13 July 2019 - 09:07

This is a not a church position, it is a choir accompanist.
As you suspected the ltd company was not originally setup for music (it was a legacy from when I was a full-time IT contractor) but when I went back into an employed position for the day job I changed the category of the Ltd company with Companies House to one which covered music. I should swap to self-employed for music as I'm still paying an accountant for some basic work, I just haven't got around to making the switch.

 

In which case I assume I still simply pay the dep from my company account and record it as an expense with no deductions.


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#4 Barry Williams

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Posted 15 July 2019 - 13:25

"I am going to be paying a dep 2 or 3 times in the next year"

 

From this statement it can reasonably be inferred that the 'dep' is 'deputising' for you.  My advice as above therefore stands.

 

I will gladly provide further advice.  If you wish, please send me a private message and we can arrange to speak.

 

Barry Williams


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