Member spotlight: Tax and Australian musicians
Published: 16 Feb 2024
Kylie Thompson and her team at Sorrento Strategic proudly supporting Ausmusic T-Shirt Day
With over 1,400 music professionals managed by Sorrento Strategic, the company’s owner, Kylie Thompson, has been busy managing the tax needs of Australian music professionals for over 25 years.
Spending five years at a practice specialising in the arts, Kylie found herself working with bands and took a strong interest in the field, so she set up her own practice and 2023 marked her 25th year in business. Her passion for working in this niche is inspiring, with her clients at the heart of it all. Kylie had a huge 2023, being awarded Accounting Consultant of the Year at both the Women in Finance Awards and the Australian Accounting Awards.
A fact worth noting is that Kylie’s first client at Sorrento Strategic was a gentleman by the name of John Butler who at the time was a busker in Fremantle! Fast forward to today, and Kylie is still working with him.
Kylie works with organisations to help support the grassroots level of music, including her role as Treasurer of West Australian Music and the WA Strings Attached Guitar Festival. She has also recently been appointed to the Board for the Australian Live Music Business Council. Kylie also contributes to the AIR Women in Music Mentorship Program and provides financial literacy workshops and is an assessor and mentor for the program. You’ll also find Kylie doing tax-time workshops for music professionals.
Covid-19 was an interesting time for musical professionals, which is one of the reasons Kylie became a member of The Tax Institute. During the pandemic, Sorrento Strategic was processing 150 JobKeeper registrations and found the Institute’s tax updates very helpful.
“When we added it up, we distributed $5.3m in stimulus payments during that time. We were flat out, but the positive outcome, while being in lockdown with no performance opportunities or revenues, was that I saw musicians put their mental health and energy into writing songs, with Perth-based recording studios being booked up to six months in advance. The $750 JobKeeper payment gave musicians a stable income, and it’s a lot of money to them,” Kylie said.
“My clients are continually working on their craft, their passions, but it can be a tough gig that comes with highs and lows in income. Ideally, we could follow some European countries, where musicians receive some form of supplemental payment to stabilise their income. My clients work hard to contribute, and although they aren’t unemployed, being a creative and doing what you love, means they struggle to pay the bills sometimes. I have had difficulty working with the ATO to build on its understanding of these issues and helping to explain artist averaging, ensuring that the ATO understands the importance of its correct application when it comes to the ebbs and flows of musician’s incomes specifically.”
“I love working with creatives, my motto is, ‘relax, it’s just tax’, and we’re able to provide support with their taxes, while understanding how their income works,” Kylie said.
“Things have also changed a lot since I started working with bands — with record sales, you had physical sales of records, and artists would earn more. Every time you sold a cassette or physical merchandise you’d receive, $20 or $30. However, Spotify currently pays $4,000 for a million streams,” Kylie reflects.
“If you want to make it big in music, you need to tour America. When I was starting, I reached out to my network to provide specialist tax advice on US foreign tax credits and the double tax agreement, and what to claim in Australia to help when working with Aussies who started to make it in America. Max Hendriks, CTA (a fellow member of The Tax Institute) was able to provide me with advice, and I finally met Max in person this year at the Australian Accounting Awards, and he remembered helping me some 15 years earlier. Our tax community is great,” Kylie said.
Kylie also works with charities, including Support Act, which is a charity for the music industry to deliver crisis relief services to musicians, managers, crew and music workers who are unable to work due to injury or mental health problems. The charity offers a variety of services, including tax assistance, which can often be stressful to deal with. Sorrento Strategic is one of two tax agents that Support Act recommends. As an annual fundraiser, this charity runs Ausmusic T-Shirt Day on 30 November each year, where you can wear an Aussie band t-shirt and make a donation or buy a t-shirt to contribute to this cause.
“I enjoy working on various industry boards to make a positive difference at the grassroots. I see the day-to-day details at a micro level, which provides valuable insights to decision-makers in the industry that make a difference at the entry-level of the industry.” Kylie said.
Interested in a learning about membership with The Tax Institute? Explore here.
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