Surely this has got to depend on how much money is involved. If this is Joe Folksinger singing for his mates and just covering the cost of coffee, then that's a rather different situation from someone doing professional gigs in a house concert situation (eg. the Berrymans).

And really this is regardless of profit. Even if you're not making a profit, once there's significant money passing through your hands then it's worth telling Mr Taxman about it, to keep the buggers off your back.

FWIW, if you're doing significant amounts of this then it might be in your interests to set up a small company to handle your music-related stuff. Instruments, PA gear, food and drink for concert-goers and any other costs involved in your music then become tax-deductable business expenses, which in the UK gives you 22% extra purchasing power. The downside is that you need to declare any profits for tax as well, but if you're a gear-head like me then your profits are likely to be small compared to your equipment purchases! :-)

Graham.