-Get an ABN. If you don’t have an ABN, anyone paying you royalties legally has to withhold 46.5% of royalty payments to be paid to the taxation office.
-Keep thorough records of all money going in and out. Keep a record of every expensive you can possibly claim on music business (e.g. coffee with your manager).
-Start a new bank account to only be used for your “music business”. Make sure all your music business transactions go through that account so you have a record of everything in one place.
-Get your head around GST. IF your business turnover is more than $75,000 you need to register for GST. Being GST registered means you must charge GST on your invoices, and submit a quarterly Business Activity Statement 9BAS) statement. However if you have a small turn over it may be possible to only lodge your BAS quarterly. In your BAS statement you report all sales/expenses and the associated GST paid/collected for each.
-Always put a bit of money aside for income tax & GST. Ideally use a separate account to hold this money.
-Register your songs with APRA to make sure you get paid when your song is played in public (e.g. at a club). If you are GST registered, make sure you let them know.
-Find out what tax benefits there are for musicians. Here are a few examples-
“Special Professional Income Averaging Offset”
This allows musicians to average their income over 4 years and pay tax on that, instead of paying heaps one year and nothing the next.
“Entrepreneurs Tax Offset (ETO)”
If you are making a profit, but its under $50,000, you may be eligible for the ETO. The ETO means a 25% reduction on the tax you have to pay.
-Get professional advice from an accountant
-Brian Tucker (Arts Accountants)- www.briantuckercpa.org
-Money Penny (Entertainment Accountants)- www.moneypenny.com.au
-Australian Taxation Office- www.ato.gov.au
-Australian Company Information- www.asic.gov.au
-Australian Performing Rights Association- www.apra–amcos.com.au
About the Author:
Austep Music provides CD replication, offset printing, and promotion resources for the Australian Music Industry.
A key player in the Green Music Movement, Austep Music specialises in eco-friendly card CD packaging, and is a founding partner of the Australian Green Music Coalition. All Austep CD packaging is printed with 70% recycled card and vegetable based ink, at no extra cost.
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