Tax Information for Martial Arts Instructors
As a martial arts instructor there are a number of areas that you should consider in relation to the way your school can be run as a business to make it more tax efficient for you:
Tax issues
Your martial arts activities will be deemed to be self-employment so you must register as such within three months of starting up. If your earnings are likely to be small initially and you are still in full time employment then it would be wise to consider applying for small earnings exemption from Class 2 National Insurance. Your TaxAssist Accountant can advise and help you on this.
As you will probably operate as a self-employed person, you will also need to put aside your tax and Class 4 National Insurance liabilities which are payable twice yearly on the 31st January and the 31st July. This is particularly important when you first become self-employed as there may be little to pay in the first instance but as when you build up your business, the first payment may well be substantial.
Staff
The people who work with you should under most circumstances be employed and you should operate a PAYE scheme in conjunction with HM Revenue & Customs. It may be that they are part-time and have other employment. If this is the case then care needs to be taken that they are taxed correctly.
Trying to claim that someone working with you is self-employed rather than an employee can be difficult to justify. You should always seek professional help if you wish to operate this way. Getting it wrong is a painful and very often expensive lesson to learn as HMRC can and do go back six years where they can.
Insurance
If you don’t already have this then you should carry Public Liability Insurance to cover you, in case your students have an accident when on your premises. If you employ staff, you should also have Employers Liability Insurance.
Expenses
All of your martial arts clothing will be allowable for tax purposes as will the hire of any halls where you teach, etc.. You should take professional advice to determine what other expenses will be allowable for tax purposes.
How we can help.
We have access to libraries of information about the martial arts industry because we are part of the TaxAssist Accountants network. We offer the best service available to self-employed people and small businesses in the United Kingdom.
Every TaxAssist Accountant operates as a small business accountant so we understand your accountancy needs. Find out more about us or if you have any questions and need to speak to us right away then call 0800 0523 555.
