With touring one of the main sources of income for artistes, having an expert accountant on the other end of the phone, or actually on the tour, is an essential part of live music business management, especially when an act is performing across multiple countries and tax regimes, let alone with various currencies.
Financial planning is also vital for international tours, as artiste tax deductions can seriously impact on cashflow, while only an experienced accountant will know what can be made tax exempt in various countries.
One of the country’s leading live music specialist accounting firms is Dales Evans & Co, which works with clients including Coldplay, Mumford & Sons, Dua Lipa, Kasabian and Stereophonics.
Director Lester Dales started in accountancy in 1981 with Keith Evans & Co, and when he became a director in 1994 the firm changed its name to Dales Evans &
“As with most other businesses, the music industry and artistes in particular face an array of challenges,” says Dales.
“Unlike many business people, many artistes have not had the experience of running their own businesses – preferring to deal with artistic matter – and this makes the role of the accountant paramount in assisting them, and their manager, to plan and control their finances in conjunction with the other areas of the business.”
“Clients like to know they’re being looked after, that the people they work with are reliable”
Services at Dales Evans vary from client to client, and depend on the size and nature of the tour, but work can include budgeting, planning for cashflow, currency exchange issues and more, as Evans explains.
“We will also deal with withholding taxes and related contracting issues, collecting the artistes’ fees and ensuring they are maximised to include all sources of revenues and ensuring the tours run as financially smoothly as possible.
“We will assist with arranging insurances relating to tours and the related areas of protection required,” adds Evans. “We also review PRS deductions [from show grosses] and on occasions audit merchandise income and show settlements, he says.
“On larger tours, we will co-ordinate with on the road tour accountants and on smaller tours, on occasions, attend the on the night settlements.”
Financial planning is essential before an artiste embarks on a tour of any sort.
“It’s important to ascertain the object of the tour – is it to promote a record and increase the profile and brand of the artiste, or is it a heritage artiste more driven by the need for profit?,” explains
“Plan the cashflow of the tour in advance to ensure set up costs can be covered and cost relating to the early part of the tour. Look at differing currencies and the timing of their receipt to manage conversion, and liaise with management regarding ancillary sources of income or any specific financial requirements for the tour.”
Dales Evans has recently taken on more space within its building at London’s Baker Street, following staff numbers growing past 40.
Gillian Park is a tax consultant for MGR Touring, a division of MGR Weston Kay Chartered Accountants, with an artiste roster that spans all genres and sizes.
She has been a tax advisor for 27 years, 20 of those within the entertainment industry and for the last 13 years, she has worked almost exclusively in the sphere of artiste withholding tax.
“Worldwide, artiste withholding tax is a minefield, so live industry clients do need specialist accountancy services,” says Park. “If you consider Switzerland has in excess of 20 cantons [districts] and the tax rates and rules are applied per canton, that gives you an idea of what you’re up against.
“It’s not only tax that you need to consider – social security can be an issue in some countries too, and employment legislation, which generally ties in with the social deductions. We also handle VAT matters, which also vary from country to country.
“We have some strange queries and problems that arise that are often outside of our general brief, but simply require a bit of lateral thinking.”
There are inevitably differences between how stadium and arena artistes operate financially, and those playing smaller venues.
“The bigger the artiste, the bigger the team they have. The smaller acts might not have a business manager – or even a manager, so you will find yourself doing more hand-holding, explaining taxes to bass players and being much more involved in wider aspects of the tour,” explains Park.
“You might be looking at treaty exemptions more for the small and mid-level bands, and tax savings are often important to them for cash-flow.”
Celebrating its 30th anniversary, SRLV has a team of 160 staff working with a wide range of clients in the live industry, including artistes, producers, booking agents, managers, record labels and music publishers.
“In any industry, it’s important to work with professionals who specialise in your sector,” says director Grant Court. “They will understand their clients concerns and know the challenges they face.
“We start by advising clients how best to structure their businesses and then offer a full business management service including tour accounting, tour support claims and label share reporting.
“We work with our partners overseas to minimise the effects of local taxation and, for non-UK artistes performing here, we have an experienced FEU [the Foreign Entertainers Unit at HMRC] team. We of course also prepare year end accounts and tax returns.”
Court points out differences between the finances of small to medium sized artistes, and those larger acts.
“Income costs and profits obviously differ greatly. Smaller acts will likely be making a loss when touring and if signed to a record deal, will hopefully have tour support to cover the deficit. Profitable tours may need to account to the record label for a share of live profits.
“Larger tours will take out more insurance policies than smaller ones, as the risk and cost of something going wrong is greater.”
SRLV promotes the use of receipt apps including Receipt Bank and 1tap for tour managers to send in receipts as a fast and easy-to-use on the road solution and works with a variety of currency specialists, including Centtrip Music, to ensure clients get the most from any currency exposure.
Court also recommends clients use the live reporting service offered by PRS for Music so that their share of performance royalties on the ticket price is paid through as quickly as possible.
Harris & Trotter partner Charlotte Harris also cites PRS as a continuing topic of interest for the industry.
“Performance royalty [PRS] deductions by promoters have been a hot topic for a few years and continue to be so,” says Harris. “If your live music client is also a writer, there’s a considerable amount of money that should be coming through and we need to be checking both the deduction is correct and that it gets paid to writers.
“Worldwide artiste withholding tax is a minefield”
“The new PRS app is great in being an easy check on the PRS percentage on the settlement; you have clear information as to what discounts the promoter should be passing onto the artistes and can ensure these are applied.”
Harris & Trotter has been servicing entertainment clients for over 70 years, with more recent ones including Depeche Mode, Ellie Goulding, Two Door Cinema Club and Kygo.
“It’s really important to ensure overseas taxes are considered when budgeting. There are deadlines for some reduced tax applications, such as in the US, which is 45 days before the first performance date,” adds Harris.
“Each country has its own set of rules and there is no worldwide standard. Sometimes you find different promoters in the same country will tell you different things. This is why a music accountant is crucial. As we have so many artistes performing worldwide, we know what the promoter should be telling us.”
Ed Grossman, a consultant at Brackman Chopra, represents clients across entertainment, including many from North America.
“How involved clients get with the financial aspects is their personal preference,” says Grossman. “They like to know they’re being looked after, that the people they work with are reliable, and then they can sleep at night.
“Each artiste is an individual and they need to be comfortable that the person they are working with has empathy for the juxtaposition of their artistic integrity and their money.”
Looking ahead past Brexit, the UK’s departure from the European Union (EU) in March 2019, Grossman believes it will have little impact on tax issues.
“There isn’t an EU tax treaty – tax relationships are bilateral,” he says. “They are not governed by the EU and never will be.
“It’s important to know of course that artistes will suffer tax in most countries in one form or another, and there are differences between the countries. You will get a credit, but often not for the full amount. Anything you can’t get credit for is a tour overhead.”
Mike Donovan of MD Touring Accounting is a veteran of the sector and was Motorhead’s business manager for nearly 20 years, with other clients including Johnny Cash, James Brown and Brian Wilson.
“Tax issues aren’t likely to change following Brexit,” agrees Donovan. “What will change, and is always changing, are the individual country regulations.
“As accountants, we have to constantly update ourselves as to what the current regulations and procedures are within different countries. Individual countries still have different issues – France, for example, with its new government has become even more difficult.
“The whole idea of being a tour accountant is, in a way, an attempt to keep up to date with things outside of our control – we can’t do anything to influence – the live music industry is a tiny little part of it all.”
An on-the-road tour accountant for artistes such as Robbie Williams, Radiohead and Nick Cave, Bullocks Touring director Adrian Bullock has been in the business since 1999.
From budgeting to withholding tax, paying local suppliers to promoter settlements, Bullocks offers many different areas of expertise, with a tour intranet service coming soon.
“Our job is to make the nasty surprises that you come across whilst touring the world, less nasty and less surprising,” says Bullock. “Issues are amplified as a tour gets bigger. A small act might not need a complicated structure, whereas as a stadium act is effectively turning over numbers associated with a plc in a very short period of time, so needs more infrastructure.
“Italy is almost becoming a no-go country for the sheer scale of admin and lack of definitive instructions from the authorities”
“But the smaller band needs good advice as there’s lots of hidden and unexpected costs they need to know.
“A crucial aspect for touring is to get your paperwork right, primarily A1 [social security] forms for band and crew when touring in Europe. Italy, in particular, will withhold a chunk of the fee if any performer has A1 forms missing. Italy is almost becoming a no-go country for the sheer scale of admin and lack of definitive instructions from the authorities.”
As for Brexit, Bullock’s view differs from Grossman’s and Donovan’s, in that there is a lot of uncertainty for the live industry and its finances.
“There’s so many unknowns with it and we don’t know what impact it will have, including taxes and social security. The US may also become more protectionist, which may make it harder and less financially viable. We will see.”