What actors need to know about taxes, National Insurance and allowable expenses.
Updated: August 2026
To help make tax season less daunting, Breckman & Company – Chartered Certified Accountants specialising in the performing arts – break down everything you need to know as an actor filing taxes in 2026 and beyond.
In this article, you’ll learn about:
- Deadlines and tax planning: Self-employed actors must pay tax by 31 January and set aside 20-50% of income to manage fluctuating earnings.
- Updated tax rules: Class 4 NICs apply over £12,570, VAT registration is required above £90,000 and Making Tax Digital mandates quarterly digital reporting for earnings over £50,000.
- Allowable expenses: Expenses must be “wholly and exclusively” for work – like costume items or industry research – and claimed carefully to prevent HMRC audits.
Tax Returns
Everyone who’s self-employed will need to complete a tax return to HM Revenue and Customs (HMRC) and pay any money owed by 31 January.
Tax is payable on 31 January with an additional payment deadline of 31 July if you make advance payments towards your bill. In an ideal world, we would put aside enough to settle our liabilities, but often the payment due on 31 January is substantial.
It invariably consists of two parts:
- The shortfall on the previous year
- A payment on account of the current year.
You don’t need to be an accountant to appreciate that a payment on account, which is based on a previous year’s income, usually bears no relation to the actual income earned. The punitive aspect of this arrangement is that one is paying tax on 31 January, which is about two months before the end of the tax year on 5 April.
Submitting a Claim to Reduce Payments on Account
If you haven’t taken on much acting work in a year, you can make a claim to reduce the payments. If you propose a lesser payment than what is eventually the actual figure, you would be penalised and charged interest on the shortfall. The problem is that by estimating a year’s income on 31 January, you have to assume your earning potential in the remaining two months of the tax year.
If, for the luckier actor, you’re able to get a commercial in these two months (and commercials mean big money), your estimate is wrong and the taxman reaps the benefit of the sudden commercial. You can revise the second payment on account, due in July, when more accurate figures are known.
Paying Your Tax Bill
It’s very important that some of your income is put aside to cover the tax liability that would be due in the following year. As an actor’s income can fluctuate from year to year, you may have to pay a lot of tax relating to a previous year, when you’re hardly earning now.
If you haven’t put money aside in the good year you may then find it difficult to come up with the money due. The amount to put aside will depend on current/expected earnings and could be anywhere between 20-50%, depending on levels of income.
Under the tax self-assessment system, the taxpayer does all the work for HMRC and they then send out tax demands based on figures that you provide. From time to time, they may decide to embark on an investigation into an individual taxpayer’s affairs. There are a number of reasons why they may do this:
- The individual is receiving tax refunds year after year.
- Figures submitted are inconsistent with previous years.
- HMRC are receiving details of earned income from an employer or theatre company which isn’t included in the individual’s accounts.
- An investigation at random.
Registering As Self-Employed
If you’re just starting out as self-employed, then you need to register with HMRC within six months of the end of the tax year in which you commenced self-employment, or you may incur a £100 late notification penalty.
This is done by registering for tax online on HMRC’s website or visiting an accountant who, as well as registering for you, can advise you on various other issues such as National Insurance Contributions, VAT, record-keeping, and what expenses can be claimed.
Often, actors have other part-time employed work or are in receipt of a pension, which may be taxed at source under PAYE, or other sources of taxable income. Each of these may affect the individual’s tax status.
National Insurance Contributions
There are various types of National Insurance Contributions (NICs), the most common being Class 1 and Class 4:
- Class 1 contributions: Deducted at source through PAYE for employed income.
- Class 2 contributions: Compulsory Class 2 NICs were abolished in April 2024. If your self-employed profits are above the Small Profits Threshold (£6,725), you automatically receive National Insurance credits toward your State Pension without paying Class 2 contributions. Those earning below this threshold can still choose to pay voluntary Class 2 contributions to keep up their annual credits.
- Class 4 contributions: Paid by self-employed individuals with profits over £12,570 a year (charged at 6% up to £50,270, and 2% thereafter).
Often, performers end up earning a combination of employed and self-employed income, which can result in overpaying National Insurance. To remedy this, an adjustment is either made on your tax return or HMRC will issue an assessment and process a refund—usually around 12 to 18 months after the tax year-end.
VAT
If your gross turnover exceeds £90,000 in any cumulative 12-month period, you must register for VAT. Once registered, you must add VAT to your fees and account for it on your returns.
If you fail to notify HMRC within one month of crossing the threshold, you may incur penalties based on the tax due. Strict accounting rules and penalties also apply for late returns.
Making Tax Digital (MTD)
Making Tax Digital for VAT is already mandatory, meaning VAT returns cannot be submitted through HMRC’s standard portal; they must be submitted using MTD-compliant accounting software (or spreadsheets paired with bridging software).
For Income Tax Self Assessment (ITSA), Making Tax Digital is being introduced in phases based on income:
From April 2026: Self-employed individuals and landlords with qualifying gross income over £50,000 must keep digital records and submit quarterly updates to HMRC.
From April 2027: The requirement expands to those with qualifying gross income over £30,000.
What Expenses Can You Claim as an Actor?
The descriptions of the various expense headings can be modified according to the role they play in your repertoire. You’re restricted somewhat by the all-embracing HMRC interpretation of what expenses can be claimed. The legal mantra is that expenses claimed are to be “wholly and exclusively incurred in the performance of the business,” but this is not always clear-cut and may cover a multitude of sins.
By a process of elimination, we can see that a media person’s expenditure bears no relation to that of a taxi driver or plumber. Generally, the taxman would not allow clothing as an expense, but if an actor were to buy clothing for a particular performance or for rehearsals, then this expenditure would be allowable.
Also, if a performer were required to attend a film premiere where they are likely to be photographed for publicity purposes, then the outfit they chose to wear could also be allowable.
Broadly speaking, everything an actor does can be related to their work. They have to know what is going on in theatre and television. But, and it is a big but, the claiming of expenditure, wholly and exclusively, has to be done with care and not be abused. Over-claiming will lead to problems later on if the taxman decides to investigate.
Children and Tax
Children under the age of 18 are taxed in much the same way as adults. The main difference is that children under the age of 16 do not pay National Insurance.
For the most up-to-date tax return guidance, please visit the HMRC website. The content of this article is intended for general guidance only and represents our understanding of current law and HM Revenue & Customs practice. No responsibility for loss by any person acting or refraining from action as a result of this article can be accepted. We cannot assume legal liability for any errors or omissions this article may contain.
For further advice and all your accountancy and taxation needs, contact Graham Berry or Richard Nelson at Breckman & Company, Chartered Certified Accountants.
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